Street signs: Nifty around key support zone, FPIs step up selling, and more

Nifty around key support zone

The benchmark Nifty is hovering around the key support zone and a further dip of less than 2 per cent could trigger a sharp fall, say technical analysts. The benchmark index on Friday closed at 17,102. "Trading below 17,000 may trigger further weakness up to 16,800-16,700," says Amol Athawale, deputy vice-president, Technical Research, Kotak Securities. “The immediate supports for Nifty are placed around 16,800, followed by 16,600,” adds Ruchit Jain, lead research, 5paisa.com. On two past occasions, the Nifty has managed to rebound sharply from the 16,900-17,000 zone.

FPIs step up selling in January

Foreign portfolio investors (FPIs) have stepped up their selling of Indian shares in January after being net buyers in the first few sessions of the year. The investors have net sold equities worth Rs 28,259 crore till January 28, NSDL data showed. "FPIs have been booking profits in IT stocks where they have been sitting on big profits after the huge appreciation in the last two years. FPI selling has also depressed the stock prices of financials, particularly that of leading banks," said VK Vijayakumar, chief investment strategist, Geojit Financial Services. The proposals in the Union Budget on February 1 are likely to provide the next immediate trigger for these investors.

Consumer durables in focus

Shares of consumer durable companies have come under focus ahead of the Union Budget. Savvy investors have built long positions in counters such as Havells India and Crompton Greaves in hopes that they will benefit from Budget announcements around production linked incentive (PLI) schemes and rural India. Market players say the PLI scheme, which commenced from FY22, some could get extended by a year or two. On the rural front, they expect measures to boost income. At present, the rural segment accounts for 20- 30 per cent sales of consumer durable firms. Moreover, consumer durables have structural tailwinds like healthy return ratios, growth potential and low penetration levels.