Market remains flat in March but around 200 smallcaps tumble up to 41%

The market closed more than 2 percent higher in a volatile week that ended March 31 amid a recovery in global markets on easing of banking sector concerns and at home, FII, which turned net buyers, added to relief.

During the week, the 30-pack Sensex added 1,464.42 points, or 2.5 percent, to end at 58,991.52, while the broad-based Nifty rose 414.75 points, or 2.44 percent, to 17,359.80. The benchmarks ended flat for March.

“Domestic equity markets ended the week on a strong note. For the week, domestic markets closed in the positive territory… Most of sectoral indices reported positive gains during the week. However, the BSE power index saw negative returns during the week,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

In the quarter ended March 31, 2023, the Sensex and Nifty shed 3 and 4 percent, respectively. In FY23, the Sensex was up 0.72 percent but the Nifty was down 0.6 percent from the previous year.

During the week, the BSE midcap and largecap indices added 2 percent each, while the smallcap gained 0.7 percent.

“Key global equity markets also witnessed a recovery, even though sentiments remained volatile. Eurozone headline inflation slowed to 6.9 percent in March 2023, down from 8.5 percent in February 2023,” Chouhan said.

Markets would continue to focus on inflation numbers across key economies and related central bank actions, he said.

Domestic markets would keenly the Reserve Bank of India’s policy meet planned from April 3-6. Over the coming weeks, the focus will also be on Q4FY23 earnings season, Chouhan said.

On the sectoral front, the Nifty PSU bank index rose 4 percent, information technology index 2.7 percent, metal index 2.3 percent and the pharma index gained 2.2 percent.

In March, the BSE smallcap index shed 1.4 percent as nearly 200 stocks declined up to 41 percent. Future Consumer, GRM Overseas, Brightcom Group, SVP Global Textiles, Xelpmoc Design, Vakrangee, Sobha, Take Solutions, Tanla Platforms, and Dynemic Products fell between 10-41 percent.

Over 50 stocks added more than 10 percent. These  included Anupam Rasayan India, Mangalore Chemicals and Fertilisers, Krsnaa Diagnostics, Jain Irrigation Systems, Shivalik Bimetal Controls, Kirloskar Oil Engines and Centum Electronics.

Foreign institutional investors (FIIs) turned net buyers during the week, buying equities worth Rs 2243.74 crore, while domestic institutional investors (DIIs) bought Rs 4,955.78 crore worth of shares. In March FIIs bought equities worth Rs 1,997.70 crore and DIIs Rs 30,548.77 crore.

Where is Nifty50 headed?

Ajit Mishra, VP-Technical Research, Religare Broking

The Indian market is taking comfort from stability in global markets and we expect the positive tone to continue.

The Nifty, which ended a two-week consolidation phase (16,800-17,200), may take a breather around 17,400 before marching to 17,600. Amid all the positivity, participants shouldn’t go overboard and focus on stock selection.

Amol Athawale, Deputy Vice President-Technical Analyst, Kotak Securities

On daily charts, the Nifty formed a higher bottom and on weekly charts, a long bullish candle pattern, which is broadly positive.

After a long time, the index is trading above the 20-day simple moving average (SMA), which, too, indicates a further uptrend.

For traders, 20-day SMA or 17,200 will act as a sacrosanct support zone and above it, the index can rally to the 200-day SMA or 17,450 -17,550. But below the 20-day SMA, uptrend will be vulnerable.

For the Bank Nifty, the positive sentiment is likely to continue and 40,200 could be the key support. Above it, the index can rally to 50-day SMA or 40,800. Any further upside can lift the Bank Nifty to 41,250.

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