The equity market continued to consolidate in an uncertain global environment.

Nifty/Sensex fell slightly 69/136 points (-0.4%/-0.2%) to close the week at the 17103/57061 levels. Midcap 100/Small 100 underperformed and fell -1.4%/-2.7% during the week. The majority of sectors ended in the red, with media being the biggest loser – down 6.2%. It was followed by IT and Metals which lost around 2% each. On the other hand, FMCG witnessed buying this week and rose 0.5-1%. FIIs continued to sell, having sold shares worth more than Rs 11,000 crore while DIIs were buyers worth Rs 10,000 crore.

Global signals were mixed as energy tensions escalated after Russia cut off gas supplies to Bulgaria and Poland. The mixed earnings season so far and the lockdown in Beijing and Shanghai due to rising Covid-19 cases in China have also impacted investor sentiment.

Oil extended gains for a fourth day as supply fears trumped blockages from China, while Germany dropped its opposition to an EU ban on crude imports from China. Russia. On the other hand, US GDP fell by 1.4% in Q1 CY22, although this did not weigh heavily on market sentiment.

Domestically, developments on the global front kept markets volatile. There was also some caution ahead of the US Fed meeting next week, the opening of the LIC IPO on May 4 and the implementation of the new F&O margin rule from Monday 2 may.

Media fell the most as TV18 witnessed the selling pressure after the James Murdoch and Uday Shankar deal was announced. FMCG and Auto saw buying as HUL released strong numbers while Auto demand appears to be resurgent.

Markets are witnessing volatile swings weighed by concerns over decades-high inflation, a possible aggressive interest rate hike by the US Fed and slowing global economic growth as well as a protracted war between the Russia and Ukraine.

In addition, the relentless selling of FIIs is hampering investor confidence. Despite this uncertainty in the market, Nifty held onto its key psychological level of 17,000 points.

Going forward, volatility is likely to continue as the focus shifts to central bank policy meetings scheduled for next week, where the US Federal Reserve and Bank of England are expected to raise interest rates.

Apart from that, a slew of economic data releases, monthly auto sales data and the ongoing earnings season would keep investors busy.

The mega IPO of LIC would also hit Dalal Street on May 4, 2022, which is expected to attract many retail investors to the stock market, but may suck some of the market liquidity.

(The author is the Head of Retail Research at Motilal Oswal Financial Services Limited)

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