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Below Quote Weekly Market Analysis By Mr. Ajit Mishra, VP - Research, Religare Broking Ltd

Markets finally ended five-week of the successive rise and settled with a cut of over a percent amid mixed cues. The tone was downbeat from the beginning, tracking feeble global cues and the benchmark traded volatile till the end. Majorly, global factors like the possibility of aggressive tightening by the US Fed and a rebound in crude kept the participants on their toes. Consequently, the benchmark indices, Nifty and Sensex, lost over a percent each to settle at 17,558.9 and 58,833.8 levels respectively. Most sectoral indices traded in line with the benchmark however IT index shed over 4%. Meanwhile, the outperformance of the broader indices capped the damage.

The coming week is a holiday-shortened one and it marks the beginning of the new month also so participants will be eyeing important data like auto sales numbers. Before that, we’ve Reliance AGM on Aug 29 and core sector data and GDP data scheduled on Aug 31. Amid all, the performance of the global indices especially the US would remain on the radar for cues. 

Nifty is taking a breather after a phenomenal surge and currently hovering in a narrow range of 17,300-17,800. It would be critical to see how our markets react to the US fall on Monday as we were showing tremendous resilience so far. A decisive breach of 17,300 would push the bulls on the back foot and Nifty might retrace towards the 16,900 zone else the consolidation would continue. In case of decline, profit taking could be widespread however the IT pack looks weakest amongst all. We reiterate our view of focusing more on risk management during this corrective phase and suggest continuing with stock-specific trading approach until the Nifty resume the trend.

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