The market started the last day of the week higher but a heavy bout of profit-taking pushed indices into the red on September 2. After a volatile day of trade, the benchmark indices finally ended flat tracking mixed cues from Asian and European counterparts.
Investors were on the edge ahead of the US non-farm payroll data due later in the day. The data tracks the number of people employed in the US (excluding the farming industry). A strong jobs report could encourage the US Fed to go for another steep hike in interest rates during its September policy meeting but this might not be taken well by the equity market.
At close, the 30-pack Sensex was up only 36.74 points, or 0.06 percent, at 58,803.3 and the Nifty ended the day with a marginal loss of 3.35 points, or 0.02 percent, at 17,539.45.
“The market struggled for a firm direction today as global markets were largely under selling pressure ahead of the release of US job data, which could provide insight into upcoming Fed actions,” said Vinod Nair, Head of Research, Geojit Financial Services.
Oil prices rose ahead of the OPEC+ meeting on the expectation of a reduction in output even though weak global growth prospects remain a concern.
“A surging dollar index and rising US bond yields could be reflected in the elevated volatility of the domestic market in the near term," added Nair.
Domestic markets remained volatile during the week. While Sensex and Nifty returns were flat, the midcap and smallcap space saw interest from market participants. Both midcap and smallcap indices gained 1.4 percent during the week
ITC, Adani Ports, HDFC, L&T and HDFC Bank were the top gainers on the Nifty as they closed 0.9 to 1.8 percent higher from their previous day’s close.
BPCL, Shree Cements, Hero Motocorp, Hindalco, and ONGC were the top Nifty losers, with declines ranging from 1.5 to 2.8 percent.
Among sectors, Nifty financials, FMCG, banks and metals edged higher by 0.15 to 0.5 percent. Selling pressure was witnessed in the stocks of PSU banks, pharma, IT, auto and realty.
Stocks and sectors
On the BSE, the BSE Capital Goods index was the top gainer, up more than 1 percent. BSE Industrials ended with gains of just under 1 percent. Oil & gas, energy and metals were the top losers on the BSE, down close to 1 percent each.
The broader indices too ended the day on a negative note. The BSE midcap index was down 0.35 percent and BSE smallcap index gained 0.04 percent.
The India VIX, which indicates the degree of volatility traders expect over the next 30 days, declined 1.6 percent from 19.9 to 19.6.
A long build-up was seen in Astral Pipes, GMR Infrastructure and Hindustan Aeronautics, while a short build-up was witnessed in Shree Cements, Hindalco and Container Corp.
Among specific stocks, a volume spike of close to 100 percent was seen in Delta Corp and McDowells.
Close to 220 stocks touched their 52-week highs on the BSE. These included ABB, Adani Enterprises, Hindustan Aeronautics, ITC Ltd, NHPC, NTPC, Pidilite Industries and Tejas Networks.
Outlook for September 5
Amol Athawale, Deputy Vice President-Technical Research, Kotak Securities Ltd
Global macro-economic concerns continued to make investors jittery as markets gyrated sharply in intra-day trades before ending marginally higher on selective buying.
Technically, the Nifty formed a bullish candle on the weekly charts. However, after a stellar rally, the index witnessed profit-booking at higher levels.
The index is moving in the 17,450-17,700 range. For traders, the 20-day simple moving average (SMA) and 17,450 will be the important support zone, while 17,700 could act as a major hurdle.
We are of the view that a directional upside move is possible only after 17,700 breakout, above which the index can move to 17,900-18,000. If the index slips below 17,450, it can retest 17,250-17,150.
Siddhartha Khemka, Head-Retail Research, Motilal Oswal Financial Services Ltd
Indian markets have shown resilience despite several global headwinds. While in the near term, the market may remain volatile in a broader range, we are positive on the mid to-long term perspective on the back of healthy domestic macros, strong fundaments, earnings growth and an upbeat festive season.
The Broader market has been outperforming and is likely to remain in flavour with action in niche midcap sectors.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The Nifty posted a negative close on the weekly chart at the end of a volatile week. The price action for the last two to three weeks shows that the index is in a short-term consolidation phase. It is witnessing sideways action below a crucial falling trendline.
The daily Bollinger Bands have started contraction, which suggests that the consolidation is likely to continue.
In terms of the price patterns, the Nifty has formed a Double Inside bar on the daily chart. Developments in the lower time frame indicate that the index is gearing up for a down move within this short-term consolidation.
With the next move down, the index can test 17,200. On the higher side, 17,700-17,780 will act as a key resistance zone.
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