IIP, US Fed meet to dictate marts

Spooked by uncertainty over the passage of GST Bill after the “noise” over National Herald case, weakness in rupee, fears of slowdown in China triggering fresh fall in commodity prices and suspense over the quantum of rate hike by US Fed; markets extended losses for second consecutive week.

The benchmark indices, the Sensex and the Nifty closed sharply lower by 594 points and 171 points at 25,044 and 7,610. Coinciding with FII sales of nearly Rs 6000 crore in the last fortnight, it is pertinent to observe that the indices have dropped to their lowest levels in three months. Non-functioning of parliament and delay in passage of key bills has dampened the sentiment.

It may not be out of place to mention that India growth story is being tarnished by personal agenda of some petty politicians. Near term direction of the market will be dictated by IIP data, inflation numbers, fate of GST Bill and US Fed meet. Analysts may interpret the Fed’s move of rate hike as a sign that it is still confident about the economy and job market despite the worries about commodity prices and slowing growth in China. Expect surprising global rally after the rate hike, say observers.

For the week ahead, chartists predict trading range of 24,500-25,500 and 7,450-7,750. Immediate supports for the indices are at 24,750 and 24,500 and 7,525 and 7,450. Expect strong resistance at 25,400 and 7,700 levels. Nifty is expected to remain weak with higher amount of volatility in near term. If Nifty breaks the low of September, it can slide to as low as 7,200 far quickly than feared.

Remember that the market moves up slowly, but goes down fast.