Dear Trader…
Indian equity benchmarks witnessed a sharp decline and lost nearly two percent in the session, amid heavy broad-based sell-off. Volatility prevailed as traders rushed to square off their positions ahead of the expiry of monthly derivatives contracts due by the end of the session. Traders were anxious with report that cooking gas LPG prices may be hiked next week after under-recovery on the fuel widened to over Rs 100 per cylinder. Some concern also came with a report from the Euro-Mediterranean Center on Climate Change (CMCC) said that in India, the decline in rice and wheat yields due to climate change could lead to economic losses between 43-81 billion EUR (or 1.8-3.4% of GDP) by 2050.
Market participants overlooked a private report stated that amidst the continuing market rally, the value of the foreign portfolio investors' holdings in the domestic equities jumped by $112 billion to $667 billion between April 1 and September 30, 2021, even though they have been getting increasingly jittery about the highly stretched valuations.
Nifty futures opened at 18194.70 points against the previous close of 18215.25 and opened at a low of 17849.30 points. Nifty Future closed with an average movement of 356.60 points and a decline of around 357.25 points and 17858.00 points...!!
On the NSE, the midcap 100 index will decline 1.96% and smallcap 100 index is closing decline 1.85. Speaking of various sectoral indices, PSU Bank, Realty, Metal and Bank stocks saw heavy selling on the NSE, while all other sectoral indices also closed with significant declines.
At the start of intra-day trading, December gold opened at Rs.48013, fell from a high of Rs.48055 points to a low of Rs.47858.00 with a rise of 57 points, a trend of around Rs.48019 and September Silver opened at Rs.64953, fell from a high of Rs.65143 points to a low of Rs.64829, with a decline of 121 points, a trend of around Rs.65044.
Meanwhile, Reserve Bank of India (RBI) Deputy Governor M Rajeshwar Rao has said that while the central bank will foster growth in the microfinance (MFI) sector, the lenders in the space should not throw caution to the wind to chase higher asset growth and returns. He said MFIs should not try to mimic the strategies of mainstream finance, as those serving the microfinance borrowers have a greater need to balance the social objectives with their lending operations.
The Deputy Governor said any slip-up through adverse action of MFIs may undo the tremendous progress achieved over the decades and the sector can ill-afford to do that. He stated that the roots and origins of microfinance should not be forgotten and sacrificed at the altar of bottom-line growth. He added that there is no denying the fact that self-sufficiency and financial sustainability are the objectives that the lenders need to pursue. However, he said prioritization of profitability at the expense of social and welfare goals of micro finance may not be an optimal outcome.
Technically, the important key resistances are placed in Nifty future are at 17970 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 18008 – 18088 levels. Immediate support is placed at 17770 – 17636 levels.
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