Last Week

NIFTY opened the week flat at 17,363 and continued its consolidation from last week. The inflation data from India did not cause any volatility on Monday. But as the days went on, the index kept moving up and up.

The U.S. Inflation data showed a 5.3% increase year-on-year for August and our market gave a breakout on this day, while many international markets moved down. Nifty closed the week at 17,585, up nearly 190 points for the week.

Telecom stocks and associated banks turned bullish after the Indian government announced multiple reforms to help the debt-ridden sector. Shares of struggling company Vodafone Idea shot up 38% in the week with this announcement. Airtel gained 6.5% in the week.

In other news, a production-linked incentive for the automotive segment was approved. 

On Thursday, Bank Nifty turned ultra bullish on hopes of announcement of a Bad Bank by the Finance Minister. This was announced after market hours with guarantees for security receipts worth Rs 30,600-crore to be issued by National Asset Reconstruction Company (NARCL), or the bad bank.

Public Sector Banks moved up in the week with the telecom sector news and the announcement of the bad bank.

On Friday, we saw a correction after Nifty opened with a gap-up and touched a fresh all-time high near 17,800 but closed with a red candle.

Foreign Institutional Investors(FIIs) net bought Rs 6,476 crore worth in the cash market, with the month’s total now standing at over Rs 7,200 crore.

Domestic institutional investors(DIIs) net sold Rs 2,896 crore worth of shares during the week.

Week Ahead

On Friday, there was the GST Council meeting with small updates from the council. There is no change in GST for Petrol and Diesel.

India VIX has gone up to 15.23, moving more than 10% in the week.

Evergrande group in China with debts of nearly $600 Billion has defaulted. This may cause a ripple effect in the global economy as even the 2008 economic crash in Lehman Brothers was for nearly the same amount.

The highest call OI stands at 18,000 followed by 117,800 and 17,600. Highest Put OI is at 17,000 followed by 17,500 and 17,600. 

Kotak Bank has nearly completed its breakout, crossing above 2,000 after many months. IndusInd Bank also shot up and hit multi-month highs giving a breakout.

The U.S. markets moved down on Friday with index and stock futures and options expiring on that day. SGX Nifty moved down to 17,400 by yesterday, showing a fall.

Nifty seems to follow proper support at 17,400 and 17,200 for the short-term. 17,000 will continue to act as a medium-term support for the index. 17,600 and 17,800(the all-time high) will act as resistances for the index.

There is also a U.S. Federal Open Market Committee(FOMC) meeting on Wednesday, keep an eye out for this.

Will have to keep watching the Asian markets tomorrow morning to see how they react to the Evergrande issue and the fall in the U.S. markets.

What do you think will happen to Nifty this week? Will the market see profit booking or consolidate? Let us know what you think in the comments section of the marketfeed app.