Dear Trader…
The 30-share BSE Sensex fell by 542.10 points or 0.82% to settle
at 65,240.68. The NSE Nifty declined 128.40 points or 0.66% to end at 19468.15.
After four months of
consecutive rally, Dalal Street bulls took Fitch’s move to downgrade US rating
as an excuse to book some profits off the table. Sensex has plunged over 1,200
points in 2 days while Nifty ended below the 19,400-zone today. In the two-day
selloff, investors have become poorer by Rs 4.4 lakh crore as the total market
capitalisation of all BSE-listed stocks dropped to Rs 302.36 lakh crore.
While Fitch’s statement
had nothing new to offer as it is a well-known fact that developed market
governments are getting more indebted,the downgrade of US rating to AA+ from
AAA is seen as being sentimentally negative for riskier assets.In sync with the
risk-off reaction in global and other Asian markets, Sensex ended 542 points
weaker on Thursday expiry day with Reliance Industries (RIL), banks and IT
stocks leading the downside.
Realty, banks and other financial stocks were
among the worst affected but pharma stocks managed to thrive in the selling
pressure on the back of Q1 earnings report card.Amid the global sell-off, Dalal
Street traders also overlooked Morgan Stanley’s upgrading of Indian equities to
overweight position.
Global Markets –
Meanwhile, in the US,
the Dow Jones Industrial Average fell 0.98%, the S&P 500 lost 1.38%, and
the Nasdaq Composite dropped 2.17%.
FII/DII Trade – Foreign institutional investors (FIIs) sold
Rs 2288.15 crore worth of shares on a net basis on Wednesday, while domestic
institutional investors (DIIs) offloaded Rs 2762.65 crore of equities, as per
provisional NSE data.
Rupee Weakens – The Indian rupee fell 5 paise to $82.72 against the US
dollar in early trade, on the back of a selloff in US equities following the
downgrade of the US credit rating.
Nifty futures opened at 19540.00 points against the previous close
of 19596.55 and opened at a low of 19390.00 points. Nifty Future closed with an
average movement of 178.85 points and a decline of around 128.40 points and 19468.15
points…!!
On the
NSE, the midcap 100 index will rise 0.24% and small cap100 index is rise 0.12%.
At the
start of intra-day trading August gold opened at Rs.59843 fell from a high of
Rs.59855 points to a low of Rs.58851 with a rise of 63 points, a trend of around Rs.59190 and
September Silver opened at Rs.72696, fell from a high of Rs.72749 points to a
low of Rs.71698 with a decline of 806 points, a trend of around Rs.72154.
Meanwhile,
Global markets are
still grappling with the impact of the US rating downgrade, with spiking bond
yield and a strengthening dollar index. However, the pharma sector has managed
to weather the storm thanks to its strong earnings outcome, while mid and
small-cap stocks have outperformed the benchmark index. The domestic service
PMI has surpassed market expectations, reaching a 13-year high due to a rise in
new orders, particularly in international sales.
As the Indian economy
is on a multi-year upcycle, Indian bulls are using the correction as an
opportunity to accumulate quality stocks at better price points for handsome
gains over the next 2-5 years.
Technically, the
important key resistances are placed in August Nifty future are at 19468 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 19505 – 19606 levels. Immediate support is placed at 19373 –
19303 levels.
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