As expected markets were trading highly volatile during the day, as traders got anxious with Fitch’s statement that India’s medium-term growth outlook will assume a more critical role in sovereign assessment due to higher deficits and a slower consolidation path, in our last note, we had only mentioned about the possibility of a selloff at higher levels in the market. The market has in recent days been volatile as stretched valuations are worrying investors. This is despite FIIs remaining bullish on India like never before. Analysts believe some consolidation is likely before another rise.
Nifty futures opened at 15050.00 points against the previous close of 15051.40, opening at a low of 14771.00 points. Nifty Future closed with an average movement of 297.95 points and a decline of around 103.50 points and around 14947 points..!!!
The NSE Midcap 100 Index was down 0.68% and the Smallcap 100 Index was down 0.79%. Speaking of various sectoral indices, IT, Metal and PSU bank stocks were seen on the NSE, while all other sectoral indices closed lower. Out of the total 2074 scrips traded on the NSE, 1313 declined and 691 rose, with no change in the price of 70 shares.
Profit-taking continued this week amid rising covid cases in Maharashtra. Fresh concerns of virus spread contributed to the fears that the economic impact will be much larger than earlier estimates. Further, reports suggested that lockdown may be re-imposed in the financial capital of the country, Mumbai also kept investors at the edge. Amid rising Covid – 19 cases in Maharashtra, one of the worst affected states from the pandemic, Chief Minister Uddhav Thackeray has said religious, social and political gatherings will be prohibited in the state from Monday. Asking people to follow “Covid-appropriate” behavior and safety norms, he said he would observe for a week to 15 days and then decide whether to impose another lockdown.
The overall market breadth has turned negative on every trade, Market may see volatility with risk of sharp and sudden selloffs at high levels remain. Traders needs to be careful and keep long positions under control and keep taking profits on trading and some investment positions.
We still maintain our stance that the trend is volatile and pullback rally is in offing and selling may emerge, hence trader needs to be cautious at current level.