Nifty Auto, BSE Energy top performing indices this week; FIIs selling, elevated broad market short-term apprehensions, says expert

The week which saw benchmark indices closing nearly 2% lower witnessed auto and energy stocks trying to provide support to the market amid volatility. The broader Nifty50 and the S&P BSE Sensex concluded the week with 1.7% and 2% losses respectively.  

However, auto and energy stocks rose as Nifty Auto closed the week ended April 22 with 3.1% gains and BSE Energy leading the pack with 3.6% gains.  

Apart from Nifty Auto, Nifty Energy with 2.4% gains, Nifty CPSE and Oil & gas were other notable gainers with each closing 2.4% higher this week.  

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On the BSE, S&P BSE Auto, S&P BSE Oil & Gas and S&P BSE CPSE gained 2.9%, 1.5% and 1.4% respectively this week.  

"Global markets have moved cautiously in context to inflation data release, uncertainties of war development, volatile crude prices, hawkish FED policy and mixed quarter results," Vinod Nair, Head of Research at Geojit Financial Services.  

Similarly, domestic market has been volatile with hawkish RBI policy and negative start to Q4 result season by IT and mixed results by the banking sector, he said.  

"Weak IT results has prompted the market to be worried about the headwinds like attrition, wage inflation, lower utilization, and possible cut in IT spending by industries due to geopolitical and macro issue," said Nair.  

Though the Fed chief’s comment on a 50 bps rate hike in May made investors cautious, the inflation is not expected to remain elevated in the long term and a change from hyperinflation to normal is likely in the short to medium term in anticipation of improvement in supply, he said.  

"However, FIIs selling and elevated level of Indian broad market considering the recent bounce are the short-term apprehensions," he added.  

On technical chart, Overall structure shows that the index (Nifty) is set to test the swing low of 16824 and below that can target 16600 in the short term, said Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas. "On the higher side, 17400-17500 will act as a cap for the short term," he added.