Daily Markets - March 5, 2021 - Mr. Deepak Jasani, Head of Retail Research, HDFC Securities
(Time Zone: Arizona, USA)
Indian benchmark equity indices ended lower for the second straight day on March 05. Nifty made an intra day high at 1015 Hrs and then kept falling making lower tops lower bottoms. At close the NSE Nifty 50 index ended 0.95% or 142.6 points lower at 14,938. Despite today's losses, the Nifty ended with 2.8% gains for the week after two successive weeks of losses.
Volumes on the NSE were in line with recent averages. Among sectors, almost all indices ended in the negative with PSU bank, Metals, Banks, IT, Pharma falling the most. Broader markets ended lower and also underperformed the benchmark indices. The Nifty Midcap index index fell 2.1% while the Smallcap index declined 1.5%.
A late rally in Chinese shares on Friday helped pull Asian stocks off one-month lows as investors picked bargains after equity investors were rattled by a sell-off in U.S. Treasuries which sent yields rising and hoisted the dollar to a three-month high. Rising U.S. bond yields put European equities under pressure again on Friday after Federal Reserve Chair Jerome Powell's remarks failed to calm investor concerns about a recent surge in borrowing costs.
Economic data due later are expected to show 210,000 U.S. jobs were added last month, according to economists surveyed by Dow Jones and The Wall Street Journal. In Europe, German manufacturing orders rose by a better-than-expected 1.4% in January, following a revised 2.2% drop in December.
In India, sales of two-wheelers at dealerships stayed below the pre-pandemic level as registrations fell for the fourth straight month amid waning pent-up demand and mounting fuel prices. Two-wheeler registrations - a measure of sales at dealerships - fell 7.7% over the preceding month in February 2021, and are close to 17% and 41% lower than a year ago and March 2020 levels, respectively. Passenger car registrations fell 12% over the preceding month in February but rose 10.1% year-on-year. Retail sales of commercial vehicles rose 5.2% over the preceding month in February but fell 31.7% year-on-year.
The broader market came under a lot of selling pressure on March 05 as unnerved by the shaken equity markets globally, short term investors rushed to take profits in mid and smallcap stocks that have risen quite well over the past few weeks. Nifty ended the week in the positive after two weeks of losses and recovered some of the lost ground even on Friday. However investors in Indian equities will look at the trend of bond yields abroad to assume higher risk and in the meanwhile the markets could consolidate/correct. 14208-14491 is the next support band, while 15150-15266 remains a crucial resistance.