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Below the Quote on Weekly Note by Mr. Ajit Mishra, SVP - Research, Religare Broking Ltd

The markets concluded a three-week winning streak with a loss of over 1.5%, largely impacted by weak global cues. Despite attempts by the benchmark indices to hold a positive tone for most of the week, a significant decline on Friday shifted the momentum. Consequently, both the Nifty and Sensex ended near their weekly lows, closing at 24,852.10 and 81,183.90, respectively. Sector-wise, energy, metals, and autos were the biggest losers, reflecting the broader market's pressure. The midcap index also lost over 1%, while the smallcap index managed to stay relatively flat, showing a mixed performance in the broader indices.

Looking ahead to the coming week, global market developments will be closely watched, with a particular focus on the US. Traders and investors will initially react to weaker-than-expected US job data, which has reignited discussions about the size of the US Federal Reserve's anticipated interest rate cut. While markets have largely priced in a 25-basis point rate cut, any adjustment beyond that could provide a positive surprise in the short term. Additional crucial data, including the US inflation report on September 11 and the Producer Price Index (PPI) on September 14, will offer further insight into the Fed's potential monetary policy moves.

On the domestic front, investors will keep an eye on key economic indicators, with the release of India's Index of Industrial Production (IIP) and Consumer Price Index (CPI) on September 12. These data points will provide important cues for the market's trajectory, especially amid concerns about global economic headwinds.

Technically, the recent decline in Nifty has disrupted the index's upward momentum, pushing it below its short-term 20-day exponential moving average (DEMA). The next significant support level is around 24,500, aligned with the 50 DEMA. In the event of a recovery, the 25,100-25,350 range is likely to serve as a strong resistance zone. Sectorally, defensive stocks like FMCG and pharma are expected to show resilience during this correction, while other sectors, especially PSU stocks, may face continued selling pressure as they exhibit signs of a breakdown from a distribution pattern.

Traders are advised to manage their positions carefully on both the long and short sides, and avoid averaging down on loss-making trades during this uncertain phase.

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