Market volatility persists amid mixed cues, Nifty, Sensex close slightly higher

Dalal Street week ahead: The benchmark indices Nifty and Sensex grappled with volatility on Friday as investor sentiment oscillated amid mixed signals. The day commenced with a lacklustre start, but pressure intensified on specific heavyweights, particularly within the IT sector, following Accenture's revelation of a downward revision in its FY24 revenue growth guidance. Moreover, the volatility heightened as the session progressed. 

However, a resurgence in global markets towards the end of the day spurred a rebound, leading to a modest gain in the benchmark indices.

Both the Nifty50 and Sensex closed marginally higher, reaching levels of 22,096.75 and 72,831.94, respectively. Despite this uptick, sectoral performance was mixed, with realty, auto, and metal sectors posting strong gains while information technology (IT) and fast moving consumer goods (FMCG) sectors settled in the red. 

The broader indices also saw relief, gaining approximately 1.5 per cent each.

“Looking ahead, the coming week is expected to be holiday-shortened, with heightened volatility anticipated due to the scheduled expiry of March month derivatives contracts. Investors will closely monitor global indices, particularly the US markets, which have been exhibiting strength in recent weeks. The Dow Jones Industrial Average (DJIA) is poised to reach a new milestone of "40,000," with support levels seen at 39,200 in the event of profit-taking,” said  Ajit Mishra, SVP - Technical Research, Religare Broking.

Despite the recent rebound in the Nifty fueled by favourable global cues, it continues to face resistance around the short-term moving average of 20 DEMA, Mishra noted. 

Caution is advised until the index decisively reclaims the 22,200 zone, as profit-taking may resume otherwise. On the downside, support levels are observed between 21,500-21,800.

Mishra further said, given the mixed trends across sectors, investors are urged to focus on stock selection and risk management. Preference is reiterated for index majors and large midcaps, while utilising rebounds in the smallcap space to reduce positions is suggested.