Markets closed on a weak note during the week ended because of negative global cues like China’s manufacturing index dropping to a 78-month-low and Volkswagen’s emission scandal, and preliminary exit polls of Bihar elections predicting a very tight contest.
Benchmark indices the Sensex and the Nifty snapped their two-week winning streak to end the week 356 points and 114 points lower at 25,863 and 7,868. The lack of follow up buying at higher levels and renewed selling from FIIs in the cash market kept the sentiment down.
With all eyes on RBI policy meet on September 29, market players were seen exercising caution. Analysts strongly expect a repo rate cut of at least 25 basis points. Sources indicate a surprise 50 basis points cut and a prolonged pause after that.
RBI commentary on adverse impact of monsoon and fallout of slowdown in Chinese economy and currency devaluation will, however, determine the broader trajectory of the markets. The outcome of Bihar elections will dictate the policy moves of RBI, say observers.
Markets cannot be buoyed on hopes and expectations for a long period. The near-term direction of markets will depend on RBI policy meet, second quarter earnings, macro economic data, crude oil prices, movement of the rupee against the dollar and global market sentiment.
For the week ahead, chartists predict a trading range of 25,350 and 26,300 for the Sensex and 7,700 and 8,025 for the Nifty. Immediate supports for the indices are at 25,500 and 25,300 and 7,750 and 7,690. Evaluate underlying market conditions, follow the market trend, and anticipate the market’s next.
