Spooked by the crash in the Chinese markets amid the Yuan depreciation, sharp fall in crude oil and commodities; markets across the globe plunged sharply during the week-ended. Weakness in the rupee further aggravated the markets on the home front. Benchmark indices the Sensex and the Nifty ended 479 points and 163 points lower to close at 24,455 and 7,438 respectively.
Carnage in the midcap and smallcap segments continued unabated for second consecutive week. It is pertinent to observe that markets have fallen to 19-month lows and nearly 50 stocks from BSE “A” group have touched 52-week lows. Subdued macro economic numbers, disappointing corporate quarterly results and weak rupee have dampened the sentiment.
A huge redemption pressure was seen from FIIs and emerging market funds. Good administration moves from government like Pradhan Mantri Fasal Bima Yojana and Start Up Fund have been ignored by marketmen.
Trends in global markets, rupee-dollar movement and quarterly numbers from biggies like RIL, Wipro, HCL Tech and others will dictate near term direction of markets. For the week ahead, chartists predict a trading range of 23,750 and 25,000 and 7,200 and 7,625 for the BSE and the NSE respectively. Immediate supports for the indices are at 24,100 and 23,800 and 7,325 and 7,225.
Investors are looking too scared to dip their toes back into stocks but the current market correction, like many others throughout history, should be the time to buy.
The financial markets are becoming more and more volatile. Be flexible and willing to sell short as you are to buy.
