NEW DELHI: India’s equity market benchmark indexes- BSE Sensex and NSE Nifty50- ended their bull run last week on account of negative global developments such as sooner-than-expected tapering in monetary stimulus by the US Federal Reserve, rising cases of the Delta variant of the coronavirus and China’s regulatory crackdown on its listed companies.
Amid heavy selling on Friday, Sensex ended the week 107.97 points lower at 55,329.32 and the Nifty fell 78.60 points to 16,450.50. Global markets too contracted last week. With earning season getting over and absence of any major domestic event beside the monthly expiry of futures & options contracts, it will be the global factors that would shape market movement this week. Experts say, traders should observe support level very closely as this week may turn out to be another volatile one.
“For the coming week, the cluster of supports at 16350 – 16250 – 16150 (Nifty) are to be observed closely. As of now, there is no indication of Nifty sliding below the lower range of this support zone. But you never know how global developments pan out,” said Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking).
Talking about sharp sell-off across sectors, Chavan said if we meticulously observe the individual stocks outside IT and FMCG spaces, the brutal knocks are visible. “There has literally been an onslaught in many counters from the derivatives space as well, which is really heart-breaking for traders as they got trapped all of a sudden looking at the bright posturing of benchmark indices,” he added. Gaurav Garg, Head of Research CapitalVia Global Research said that the domestic cues are good, and both unicorns and traditional companies are lining up to go public. But there are few things that may trouble the markets.
“First, the central government of Sri Lanka raised interest rates for the first time since the epidemic hit the world, making it the first Asian country to do so. Second, the US central government is signalling that the liquidity it provides to the market would be tightened, and finally the Taliban capturing the Afghanistan which had already hampered the imports and exports of India with that country,” Garg told TNIE.