What is your trading view for Monday 01 March after the sharp correction that we saw on last Friday with Sensex losing 1939 points?

The previous week saw a sharp correction of 3% in the market of which Friday alone saw the Nifty and Sensex giving up 3.8% value. Both the Nifty and Sensex closed on Friday below the psychological levels of 15,000 and 50,000 respectively. These levels will now become the resistance levels and the deciding points. FPI transactions will be the key this week.

The big villain last week were rising bond yields and the geopolitical risk caused by the US airstrikes at Iranian targets in Syria. Iran’s reaction to the airstrikes is yet to be seen but based on past experience it can be assumed that they would not take it lying down. Of course, bond yields in India will largely depend on the US and how RBI TLTRO pans out.

FPIs were net sellers worth Rs.8295 crore on Friday while DFIs bought Rs.1500 crore. This was the first day in a long time when heavy basket selling was visible in frontline counters. The worry is that even on 24 February when the NSE was shut and there was net FPI buying of Rs.28,500 crore, it was accounted for by a Rs.30,000 crore block deal on Bosch Ltd.

Global cues were broadly negative on Friday. The Dow was down over 470 points and most of the European markets including FTSE, CAC and DAX were deep in the red. However, NASDAQ was in the positive and even SGX Nifty and the Nikkei are strongly positive in early trades on Monday. Asia could largely set the tone for the day.