How do you see the markets shaping up on Monday, 14th March? What do you think will weigh the most on Nifty and Sensex?

The previous week was strong with about 2.87% of gains during the week. However, as the markets embark on a new week, we must remember that this is an important week for data flows. This week will see very critical data flows in terms of the Fed rate decision, Fed guidance, India retail inflation, India WPI inflation, trade data etc.

On Friday, Nifty gained a subdued 39 points and the A/D ratio also stayed positive at 28:12. The impact on VIX was limited as it marginally tapered to 25.35 levels. The VIX will now depend on how the trajectory of war and oil prices shape up during the week. The Fed meet outcome on 16th March will continue to be the big VIX overhang this week.

Foreign investors sold equities worth Rs.2,264 crore while domestic funds bought stocks worth Rs.1,647 crore on Friday. On Friday, DOW and NASDAQ ended down, while Europe closed higher. The SGX Nifty is trading with early losses of about 50 bps on Monday morning. Expect volatility and selling due to being a truncated week this time around.

Yes, to answer the second part of your question, it will be all about Fed action on rates and their guidance for the coming months. CME Fedwatch is hinting at a high probability of 25 bps with an outside chance of 50 bps. From here it will be about expectations versus reality. A 25 bps rate hike and cessation of hostilities will be positive for markets overall.