The indexes of key national actions could slip further in the next week, since the tensions prevailing between India and Pakistan, together with the high world prices of crude oil, are expected to weigh on the feelings of investors. Analysts predict the continuation of investors’ negative reaction to rising tensions between India and Pakistan after a major terrorist attack in Jammu and Kashmir and any other outflow of foreign funds.
In addition, the depreciation of the rupee against the US dollar and the dynamics of the emergency declared by President Donald Trump regarding the financing of a southern border wall will hinder any progress.
“The geopolitical tensions within our neighborhood will keep the market to the limit,” said Deepak Jasani, head of retail research at HDFC Securities.
“Although terrorist attacks produce slightly negative effects on prices, markets typically recover lost ground soon, unless there is an increase in hostilities.”
According to Sahil Kapoor, chief market strategist, researcher, Edelweiss Wealth Management: “Nifty is approaching crucial support in the range of 10,600-10,650 points, a breakdown of this range can result in a fall to levels of 10,350 points.
“The global rally has offered little support to the Indian markets that are facing their own set of problems once again, deteriorating the trade deficit, hindering fiscal revenues and restricted liquidity.” Wait for some consolidation to be followed by a new one. downward movement “.
In addition to tensions between India and Pakistan, crude oil prices of around $ 62-65 per barrel are expected to hurt investor sentiment.
More rise in oil prices has potential to inflate import bill. The increase has already raised the cost of gasoline in the national capital to Rs. 70.60 per liter.
“Crude oil prices will be in the spotlight, as any increase in prices is expected to increase the country’s macroeconomic concerns,” said Vinod Nair of Geojit Financial Services.
“Expecting that the current market volatility will continue even further, with no significant positive shootings for next week and that 10,500 act as a crucial support zone for the market.”
In addition, the movement of the rupee price against the US dollar will also be crucial for the market, especially in the context of a continuous outflow of foreign funds.
“The geopolitical risk premium (tensions between India and Pakistan) after the Pulwama terrorist attack along with the high oil prices and supervised dollar trends will affect the rupee-dollar equation next week,” Anindya Banerjee, deputy vice president of currencies and interest rates with Kotak Securities, he told IANS.
“At present, all these factors are negative for the rupee, which could generate depreciation of more than 71.80 points, after which we can expect an intervention from the Reserve Bank of India (RBI).”
The rupee is expected to be in a range of 71-71.80 next week.
Weekly, the rupee appreciated in 9 countries to close at 71.22 against the US dollar since its previous close of 71.31 per dollar.
Outflows of foreign funds during the week also weighed stock indexes. Foreign institutional investors (FII) sold shares worth Rs. 2,485.09 million rupees in the week ended on Friday.
In addition, global signals such as trade talks between the US. UU And China, the declaration of a national emergency in the USA. UU And international macroeconomic data points will further guide domestic markets.
In the technical letters, Nifty could further correct the immediate support levels of 10,613-10,583 points.
“The support of 10,583 points will be a crucial level to see next week as a close below that could lead to a strong fall to the next support of 10,333 points,” said Jasani.
Last week, both the key stock indexes (S & P Bombay Stock Exchange (BSE) Sensex and NSE Nifty50) were drastically reduced due to outflows of foreign funds and rising oil prices.
As a result, the S & P BSE Sensex decreased 737.53 points, 2.02 percent, during the week to end at 35,808.95 points.
The largest NSE Nifty50 ended at 10,724.40, down 2 percent or 219.2 points from the close of the previous week.