Domestic markets have got upward momentum

The week witnessed an underlying optimism in the undertone as the domestic markets remained buoyant even in the face of negative overseas cues.

The headline indices rallied on a week-on-week basis and the combined exchange weekly advance-decline ratio was even at 10840:10824. The capitalisation of the market breadth was negative at Rs47,364 crore: Rs53,931 crore.

The profit-taking bias on the last day of the week was responsible for the weak capitalisation. In terms of sectoral biases, the banking and mid-cap segments were the top gainers, whereas the technology segment underperformed on weak Nasdaq cues. The NSE gained Rs92,030 crore in market capitalisation on a week-on-week basis.

Overseas investors were net buyers to the extent of Rs3729.70 crore (data for August 18 unavailable from Sebi), which saw the rupee close at the 46.67 levels vis-a-vis the USD (previous week 46.76 levels).

The US markets out-performed the UK markets relatively as the Nasdaq managed to close with mild gains over the previous week. In the Asian region, the Chinese markets outperformed their peers even as the Hong Kong and Japanese indices softened. Singapore managed to close the week with little change. Overseas cues for the domestic markets are neutral to negative this week.

Technically, the domestic markets have gathered upward momentum and are heading towards a trendline resistance near the 5600 levels. The Nifty weekly range advocated last week between the 5575/ 5300 levels held as the index gyrated between these.

This week is likely to witness a range of 5650 on the upsides and 5300 on declines. The bullish pivot for the week is likely at the 5500 levels and the bearish pivot at the 5450 levels. Traders are advised to book part profits near the 5600 levels as the markets may witness mild unwinding. The impeding expiry of the August F&O series is likely to have the pull-push impact on price discovery.