What is your trading view for Monday 22 March? Do you see the recovery sustaining or will Nifty and Sensex correct once again?

Friday offered some relief to the markets as the Nifty rallied nearly 400 points from the lows of the day and the BSE Sensex rallied 1250 points. The indices managed to close in the green after 5 consecutive days of losses. The big gainer in the week was safe haven, Hindustan Lever even as most of the traditional favourites like metals and banks floundered.

In the midst of all the negative cues, two positive trends stood out in the midst of all the market correction. The volatility index as measured by the VIX, has continued to trend lower below the 20 mark. This is a good signal of markets bottoming out. At the same time, the FPI data has been consistently showing inflows in spite of the tepid market conditions.

FPI flows were positive on Friday with net buying of Rs.1418 crore as domestic institutions bought Rs.560 crore of equities. FPI flows have turned around to positive in the last 4 days after being sellers almost consistently since late February. FPIs have now infused Rs.9,000 crore in March 2021 despite the weakness in markets overall.

Friday again saw weakness in the global markets. While the Dow Jones industrial Average and all European indices like the FTSE, DAX and CAC were in the red, NASDAQ closed nearly 80 bps higher. However, Asian markets continue to trail on Monday even as SGX Nifty is flat to positive in early trades. It does look like the global impact could really rub off.

The good sign is the fall in VIX, which signals that the markets maybe closer to a bottom than to a top. Hence this could be the right time to selectively start buying stocks at lower levels. Of course, the big theme will have to be the proposed turnaround in growth in the Indian economy in fiscal year 2022.