Dear Trader…
Domestic equities has corrected by more than 4% over last four trading session as global uncertainties dominate market sentiments. A short bounce or reversal can be seen following this intense selling. However the overall narrative of the market remains weak, especially following the cautiousness ahead of the RBI MPC due later this week.
The RBI’s decision and the outlook would hold great importance post the rate hikes announced by many Central Banks globally following the US Fed aggressive outcome. Even the monthly F&O expiry this Thursday would keep the markets volatile. Fragile global factors and FII outflows would continue to keep the pressure on the market and thus 17000 level would act as a key support level, below which the weakness could intensify.
Nifty futures opened at 17175.00 points against the previous close of 17335.85 and opened at a low of 16981.10 points. Nifty Future closed with an average movement of 230.75 points and a decline of around 298.85 points and 17037.00 points...!!
On the NSE, the midcap 100 index will decline 3.11% and smallcap 100 index is closing decline 3.41%. Speaking of various sectoral indices, the NSE saw gains in only IT stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, October gold opened at Rs.49350, fell from a high of Rs.49688 points to a low of Rs.49295 with a rise of 197 points, a trend of around Rs.49598 and December Silver opened at Rs.55800, fell from a high of Rs.56412 points to a low of Rs.55410, with a rise of 59 points, a trend of around Rs.56292.
Meanwhile, the equity markets traded lower mainly tracking the developments in overseas markets especially the US. The Fed rate hike and the stance that rate hikes would continue till inflation is contained displayed in ample measure an aggressive and hawkish Fed. Even if its costs a little bit of economic growth so be it, has been the stated approach. This time around the Fed policy comes with a projection of lower growth and gradually rising unemployment.
This was to the dismay of many a market participant who believes that this is a confirmation of the US gradually entering a period of declining economic growth, a growth that is already slowing. This has affected the equity markets, and this has sent its reverberations across the world. More than anything else, it is the expectations of higher interest rates and lower liquidity that is at the back of the mind of many an investor.
High inflation, widening trade deficit, weakening currencies and a likely slowdown in growth may entrap some of the emerging market economies. The policy from the RBI is expected in the next few days, and the anchoring of the policy will be keenly watched to see its implications for the market at a time when the economy is witnessing high credit growth and a shortfall money market liquidity.”
Technically, the important key resistances are placed in Nifty future are at 17107 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 17177 – 17202 levels. Immediate support is placed at 16939 – 16808 levels.
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