Below is the Views On Market quote by Mr. S Hariharan, Head - Sales Trading, Emkay Global Financial Service
“Broader indices have pulled back from Monday's correction, albeit on significantly lower volumes, as new margin regulations for Retail investors in cash segment have taken effect starting 1st Sep. As a result, NSE daily cash segment volumes which have averaged above Rs 600 bn are down c.20% from the trend as of today, and can potentially reduce a bit more in days ahead.
Considering that a large proportion of the expansion in market volumes and delivery volumes in the last 5 months has been driven by Retail participation, this is expected to have a bit of dampening effect on bullish market trend. While market breadth had improved to a 2-1/2 year high as of last week with 75% of NSE500 stocks trading above their 200-DMA, that proportion has come down since to 66%.
Banknifty and PSU Banks appear most adversely affected this week with reversals of bullish breakouts. Metals index is trading below a 3 year trendline. We can expect rotational activity among sectors in the coming week with a sideways market at headline index level.”
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