Below is the Views On Weekly note by Mr. Ajit Mishra Vice President, Research, Religare Broking Ltd.
Markets plunged sharply lower and ended around the week’s low, pressurized by feeble local cues and not so encouraging global markets. Sentiment was downbeat from the beginning citing weak macroeconomic data and the situation worsened further as fresh concerns over the asset quality in banking and financial space triggered sharp selling across the board. In the end, RBI’s lower growth projection rattled the markets despite the rate cut of 25 bps. Among the benchmark indices, Nifty settled at 11,174.75; down by 2.93%.
The coming week is also holiday-shortened one and it would kick-start the earnings season with IT majors, TCS and Infosys, reporting their numbers on October 10 and October 11 respectively. Besides, participants will be closely eyeing the IIP data which is scheduled on October 11. On global front, the trade negotiations meeting between the US and China are likely to resume from October 10.
The decline in the benchmark has turned the participants cautious again as majority was hoping the recent surge to extend further. Though the selling pressure was visible across the board, it was banking which led the fall. And, it’s certainly not an encouraging sign before the beginning of the earnings season. We may see further decline ahead and Nifty could find support around 11,050-10,800 levels. In case of rebound, 11,250-11,400 zone would act as a hurdle. Considering the present scenario, we advise focusing more on stock selection and trade management. Investors, on the other hand, should keep a close watch on the earnings and balanced their portfolios accordingly.
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