Global cues spoil sentiment
The Indian stock market started on a positive note last week moving higher towards the psychologically important 11K mark on the back of falling crude oil prices and positive global markets. However, the final rate hike of the year in USA along with its shutdown news spooked the market sentiment globally. The Indian markets were no exception as they witnessed a sell-off on Friday. The breadth of the market remained firm during the week amidst high volumes, which is a positive sign for the markets and indicates broad-based buying support.
The FIIs were net buyers in the cash and derivatives segment ahead of the festive holidays. The DIIs, however, turned net sellers and were seen booking profits at the higher levels. The
US Federal Reserve hiked interest rates by 25 bps and indicated two hikes next year before interest rates reach their peaks. Crude oil prices moved lower on the back of high inventories and supply amidst renewed concerns of slower global economic growth. However, crude oil prices bounced back on Friday ahead of the OPEC production cuts that start next month. On the domestic front, the government plans to infuse Rs.830 billion into public sector banks in the remaining months of FY19, taking capital injection into lenders to Rs.1.06 trillion in this fiscal. Technically, the prevailing negative technical conditions weighed on the market sentiment. The Stochastic and KST are placed below their respective averages on the daily and weekly charts. Further, the MACD is placed below its average on the weekly chart while the RSI is placed below its average on the daily chart. Moreover, the Nifty has slipped below its 200-day SMA and is placed below its 100-day SMA. The Nifty’s 50-day SMA is also placed below its 100-day SMA and 200-day SMA signaling a ‘Death Cross’ breakdown. All these negative technical conditions could lead to further selling pressure, especially at the higher levels.
The prevailing positive technical conditions, however, still hold good. The MACD is placed above its average on the daily chart. Further, the RSI is placed above its average on the weekly chart. Moreover, the Nifty is placed above its 50-day
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