WHAT LIES AHEAD : NEAR-TERM PICTURE
Indian benchmark indices succeeded in breaking their 7-day losing streak and rebounded from the medium-term crucial support levels. Geopolitical tensions with
North Korea and the US creating war-like situation, Indian army announcing surgical strike at IndoMyanmar border and wariness ahead of domestic events led to the downfall in the markets. Considering the long term time frame, it was both sell-off and profit-booking that led to the much-awaited correction after a straight surge since January
2017. Going forward, the release of macroeconomic numbers followed by the RBI announcement of bi-monthly policy review and the start of corporate earnings season that would drive market movement.
Broader markets underperformed the benchmark indices where the Mid-cap and Small-cap indices plunged 4.6 per cent and 5 per cent, respectively. Sector-wise, Realty index plunged the most losing 6.8 per cent. All other major sectoral indices ended in the red. Considering current trading day’s data, Realty and Financial Services recovered gaining more than 1 per cent each. IT and Media remained marginally lower with 0.2 per cent loss. The market bias was positive, with 902 advances and 535 declines on the NSE.
Nifty, after registering an all-time high of 10,179, witnessed sharp decline and logged seven consecutive sessions of losses. However, the benchmark took support around the level of 9,687 on the eve of September series Futures and Options expiry, thereby snapping its losing streak. The level of 9,680-9,700 is a crucial support level for Nifty as previously the index has witnessed smart upside bounce from this support zone. On the upside, immediate resistance for the Nifty is pegged in the zone of 9,800-9,830, and if Nifty manages to close above these levels, one can expect it to test levels of 9,880-9,940 in the short term. However, decisive breach of support level of 9,680 may open gates for further correction up to the level of 9,600.