27 Feb , 2023 By : Monika Singh
As NSE Nifty extended losses for the seventh session in a row, it fell below the critical support level of 17,353 – the intraday low it made during the presentation of the Union Budget ‘23. However, as the benchmark index fell 0.8% in trade, banking sector index Bank Nifty traded gained 0.6%. The Budget day low coincided with the 200 DMA, another key level to watch, analysts said.
Nifty traded with a negative bias as bears take over the negative baton from Friday’s weak close at Wall Street. “We continue to expect volatility in the markets as investors worry on expectations that the Federal Reserve will need to continue raising interest rates in the next meeting. Markets now look ahead to more US economic reports such as consumer confidence and the ISM manufacturing survey,” stated Prashanth Tapse, Research Analyst, Senior VP (Research), Mehta Equities
“Breaking the budget day low is sentiment-dampening as the market has spent more than 15 days above it. However, we cannot forget that the global macro has also changed a lot in the last 15 days. Along with this, the tremors of the forecast regarding the below normality of monsoons are also increasing. In short, it is not a purely technical pullback and will continue in the medium term,”
There was a sharp divergence between Nifty and Bank Nifty on Monday, as Bank Nifty showed decent strength while Nifty was under pressure. Bank Nifty is a leading indicator in general, and the market is oversold based on FIIs’ short exposure and PCR, said Santosh Meena, Head of Research, Swastika Investmart.
The key level in focus on Monday was 17,353 – the budget day’s low – also signified by the close proximity of 200 DMA at 17,368. The closest barrier on the higher side is 17,620, the reaction high of last week, said Anand James, Chief Market Strategist, Geojit Financial Services, in a morning note. “The major level that we will be eying before Nifty slips into a multi month downtrend would be 17,050, while a weekly close above 17,740 will be key for short covering prospects,” he added.
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