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| Edited By: Yogesh Vinod Mehta |Source: DNA |Updated: Sep 24, 2018, 05:35 AM IST
With the last week move, it seems magic of Nifty rally is fading away in September. In the last short week, Nifty closed negative for the third consecutive week with a deep cut of 3.23% week on week and closed at 11143. The carnage was more severe in the mid and small cap indices as they lost 5.37% and 6.58% respectively.
The Bank Nifty eroded a hefty 5.77% led by the selling all over in the Banking and NBFC space. All the sectoral indices ended in the red. The PSU Banks lost 8.46% with Bank of Baroda losing 17% as the government proposed a merger of three banks preparing the ground for consolidation among the PSU Banks. Private banks lost 6%, Auto by 3.87% and Pharma lost by 3.76%. Energy and Metals sections also lost 1.37% and 1.10% respectively. The FIIs sold equities worth Rs 1,471 crore and the DIIs bought shares of Rs 1,782 crore.
In the last week, markets opened with a negative bias. The rupee also touched to a new historical low of 72.98.
On Friday, DHFL stock crashed by 42% on the concern that it may default on the outstanding bond repayment. Its bond worth Rs 300 crore was sold by one of the mutual fund (MF) at a discount sparking speculation that the company could be facing liquidity issues which strongly denied by the company. This triggered panic selling across the NBFCs and housing finance companies and within minutes the crash selling spread across the board. With this, the 50-share index fell to intraday low of 10866, a 480 points vertical fall in no time and recovered almost 320 points towards the closing.
In the key global events this week, the US Fed meeting on interest rate decision will be on Wednesday while the US 2Q final GDP data will be released on Thursday. India’s April to August fiscal deficit, August month infrastructure output and Q1’19 external debt data will be announced on Friday.
Last week markets faced extreme volatility fearful sell-off across the stocks and Nifty swung in a wider range of 11465 and 10866 after a very long time. Technically, last week low of 10866 is key support as it is 50% retracement level of the entire rally from 9950 to 11760 and nearing to its 200 DMA at 10750 which is again key support level in other words breach of this level can be a strong trend decider. With September F&O series expiry this week, the market will remain more volatile. This week, trading could be 10750 to 11330 with key support at 10750 and 10850 while resistance at 11000 and 11180. Key focus on oil marketing companies, NBFC, Housing Finance, IT and Pharma sector.
The writer is VP- Retail Research, Motilal Oswal Financial Services
