National indexes fell for a fourth straight week on August 18 amid growing concerns about food inflation and weak global signals, particularly from US markets.
Analysts point out that rising US bond yields continue to wreak havoc in global currency markets, fueling a sell-off in equity markets. The relatively weak macroeconomic scenario – domestic inflation rising, FII outflows, slowing China and US Fed hint of further interest rate hikes to contain inflation – is also encouraging investors. profit taking investment.
As of 10:28 a.m., BSE’s flagship Sensex was trading down 271.52 points or 0.42% at 64,879.50. NSE Nifty fell 88.45 points or 0.46% to 19,276.80. The broader stock indexes, which have recovered in recent weeks, have also seen brisk sales. The Nifty Smallcap 100 and the Nifty Midcap 100 trade at 0.4% and 0.2% decline respectively.
IT stocks were one of the biggest drags on the indexes, followed by real estate and oil and gas. Banks, especially public-sector lenders, protested, while some media stocks were also in demand.
Axis Bank and Adani Ports were the biggest winners at Nifty, while Wipro led the losers alongside fellow Tech Mahindra and TCS.
U.S. dollar
Despite falling back from two-month highs, the dollar’s highs are a source of concern for the Indian currency as it tries to hold onto recent gains. The US 10-year yield fell to 4.25%, after hitting a fresh 10-month high of 4.33% on Thursday. Steady US economic data has investors worried that US interest rates are likely to stay high for longer and policymakers are still unsatisfied with rate hikes.
Weak economies
Friday’s data showed that core inflation in Japan slowed in July, an outcome that would support markets bets that the Bank of Japan will be in no hurry to end monetary easing if soon. .
Adding to concerns about a deepening crisis in China’s real estate sector, China Evergrande, one of the country’s largest property developers, has filed for creditor protection in court. U.S. bankruptcy on Thursday. Chinese stocks have fallen 10% from their January highs as dismal economic data suggest a sluggish post-pandemic recovery, while investors remain unimpressed with the measures. partial support from policy makers.
Global market
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1% after touching a nine-month low in the previous session. However, it is heading for a weekly drop of 2.8%, the third consecutive week of declines. Japan’s Nikkei fell 0.4% and fell 3% for the week, weighing on Indian stocks.
The S&P 500 fell 33.97 points, or 0.77%, to 4,370.36 and the Nasdaq Composite lost 143.75 points, or 1.07%, to 13,330.88. The S&P 500 has dropped 2.7% over the past three sessions, its biggest three-day drop since mid-March. Nasdaq’s three-day drop of 3.4% marked its biggest three-day drop since February.
technical point of view
Technically, the price continues to fluctuate in a particularly narrow range of 200 points – 19,300 to 19,500. The trading range is defined by two moving averages, with the 50 EMA defending the price at the lower levels and the 20 EMA limiting the price at the higher levels.
“Traders should keep a close eye on these levels and instead of being swayed by market movements, they should stay in this range until a decisive breakout occurs beyond the limits. In addition, the trajectory of the market futures remains in sync with global market developments, so it is important to carefully observe these developments,” said Sameet Chavan, Head of Research, Engineering and Derivatives, Angel One said.
