Last week, the markets began on a weak note and continued the trend, closing at 356 and 114 points down at 25,864 (Sensex) and 7,869 (Nifty). The main reason being lackluster Chinese September economic data released last week. The Chinese manufacturing index dropped to a 78 month low. Other minor factors were the emission scandal at Volkswagen and the probably tight election outcome at Bihar.
Moving ahead, all eyes are on the RBI policy meet scheduled on September 29th. Many senior analysts feel that the RBI is likely to cut its Repo rates on Tuesday by at least 0.25%. The Nifty had gone above 8000 mark on last Tuesday and touched an intra week high of 8021. However, it could not surpass the resistance at 8000 with ease. Only an emphatic move beyond 8200 will turn the market bullish. The support for Nifty is at 7,800 and a strong downward movement beyond this level will accelerate the downward movement further.So caution is advised as you invest more funds into the market.
The US decision to maintain status quo on interest rates, positive economic data, strengthening rupee made the market rebound from lows. The markets have closed the second week in green ending at 26,219 (Sensex) and 7,982 (Nifty). The US fed’s decision to maintain status quo on interest rates implies that the uncertainty in financial markets will continue for some more time now.
Going ahead, the investing trends of foreign portfolio investors should be carefully watched and this might give insights into the future course f the market. In the domestic market, the demand for a rate cut from RBI is becoming louder n louder as the macro economic data has shown signs of improvement. The RBI’s next policy meeting is on September 29th and investors will be keen to guess what the outcome would be. This Thursday being the last of this month, will also witness expiry of derivatives contracts. This will add to the already existing volatility in the market.
Last week, the Indian benchmark indices – Sensex and the Nifty rebounded from year’s low to close at 25,610 and 7,789, mainly due to high participation of bottom fishers and positive interaction of the prime minister with the leaders of Indian industry. Better than expected tax collection data and IIP suggest that the Indian economy is back on track.
Going ahead, the US FOMC meet begins this week and it’s going to be very important for the financial world. Now, the best place to watch for stock market investors would be from the sidelines since high volatility is expected. The possibility is that Ms. Yellen may hike the rates or she may not – in both the scenarios, a possibility of downward movement cannot be ruled out. In the first case, it’s because a rate hike will initiate outflow of foreign funds and in the second case it is because it will send a message to the world that US economy is not doing well as expected. September 17th is the day when the results of the US fed meet is going to be announced. Indian market will be closed on that day on account of Ganesh Chaturti.
The meltdown in the market continued through last week as nervousness and fear gripped investors. There was sharp selling from FIIs and the Sensex and the Nifty triggered a weekly loss of more than 4.5%- the worst in last four years. Following the global peers, the benchmark indices closed at 25,202 and 7,655. The indices are now at 13 month low and currently the markets are ruled by fear, with short term players making losses every day. The stock markets in many countries have fallen to the grip of bears.
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