Rupee movement will drive India equities

Analysts feel the indices could offer some relief in the coming week

The domestic equity market’s movement this week will be driven by the rupee’s movements as well as futures and options expiry, besides the message from the Finance Minister’s meeting with the heads of public sector banks (PSBs).

Market analysts feel the indices could offer some relief in the upcoming week, after largely bearish trade last week.

Movement in the rupee would be a factor in the market, they said. Last Tuesday, the Indian rupee touched a new low of 72.91 per US dollar, although it recovered somewhat later.

Concerns over the US-China trade war would also impact the global and domestic market sentiments. On Friday, China cancelled talks with the US after the latter imposed more tariffs on Chinese imports.

According to reports, a White House official has said the US is optimistic about finding a way forward in the ongoing trade dispute with China.

“Global headwinds are also subsiding slowly. Hence, the market may shake off its earlier losses to witness new highs,” said Prateek Jain, Director of Hem Securities.

He, however, added: “Amid the global optimism, the market could witness a little volatility as traders adjust their positions on account of monthly derivatives expiry, which is scheduled to take place on Thursday, September 27.

“Further, there will be some buzz from the banking sector, as investors will keep an eye on the meeting of the Finance Ministry and top management of the public sector banks on September 25.”

Technically, for the Nifty50 on the National Stock Exchange (NSE), 11,050 points would be a major support level while immediate resistance level would be 11,250, said Deepak Jasani, Head of Retail Research at HDFC Securities.

In the week gone by, the Indian equity market slumped over three per cent due to a depreciating rupee along with high oil and credit risk concerns.

On a weekly basis, the Sensex of the Bombay Stock Exchange (BSE) closed at 36,841.60, lower by 1,249.04 points or 3.28 per cent from the previous week.