Market Outlook

March 14, a day that brought some relief after the turmoil of March 13. The market saw a significant recovery, with Nifty bouncing back about 250 points from its low, though it had lost nearly 550 points from the open to the low the previous day. The recovery was encouraging, but the market remains in a cautious phase, labeled as a “sell on dips, sell on price” market until it surpasses the breakdown point around 22,220. This recovery might be temporary, and only time will tell if the bounce will hold or if we’ll see further declines.

Nifty Heatmap

Yesterday’s battered sectors, like energy, FMCG, and infrastructure, saw some uplift. Notable recoveries included ONGC, Coal India, BPCL, Britannia, Tata Consumers, Nestle, L&T, Adani Enterprises, and Bharti Airtel, with Mahindra & Mahindra and IT stocks like Infosys, HCL Tech, and Wipro also performing well.Despite these movements, the larger stocks, particularly in the banking sector, showed little change, pointing to the mid and small-cap segments driving the day’s activity.

Sectoral Overview

Despite the bounce in sectors like energy, metals, and commodities, the question remains whether this recovery is sustainable or if market pressures will prevail again. Historically, corrections of 10% to 15% in a bull market are considered normal. With small caps experiencing a 13% correction, the market’s behavior isn’t outside expected patterns. Over a three-month and twelve-month perspective, most sectors are still in the green, with real estate showing a notable 116% increase, suggesting the market hasn’t fully capitulated.

Mid & Small Cap Performance

Mid caps recovered to their breakdown point, marking a crucial moment for all indices to watch if they can break out above this level, indicating the bounce’s strength. Small caps, however, are still far from their retest levels and appear weaker.

Nifty Bank Overview

Nifty Bank and the broader Nifty remained relatively flat and range-bound, highlighting the need for a breakout beyond 59,000 levels to confirm a stronger recovery.

Sector Highlights

The market’s resilience, fueled by retail investor participation, underscores the unpredictable nature of current market dynamics. With a record number of SIPs added recently, the retail sentiment can significantly influence market directions. The coming days, particularly tomorrow, will be critical in determining if the market can maintain its recovery or if it’s a temporary reprieve.

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