Last Week

Markets failed to hold gains from the previous week and saw selling pressure on the 4-day trading week.

NIFTY opened the week slightly higher at 18,140 and fell on Monday. Interestingly, on all four days of the short trading week, the market fell after opening. By the last day of the week, NIFTY took support near November’s low of 17,900. NIFTY closed the week at 17,764, down 376 or 2.07% for the week. 

BANK NIFTY continued its second straight week of decline. The index opened on Monday with a small gap-up at 38,849 and fell for all days of the week. BANK NIFTY took support at the all-time high from February budget week at 37,750 and closed the week at 37,976, down 874 points or 2.24% from Monday’s opening.

NIFTY AUTO and FMCG consolidated in the week. All major sectoral indices fell. Metals have taken a blow, moving down by more than 5%.

Reliance fell more than 4% in the week and reached its support zone of 2,450. The top 4 private banks – HDFC Bank, ICICI Bank, Kotak Bank and Axis Bank are looking weak. SBI is trying to show strength along with other smaller PSU Banks.

PayTM saw heavy selling after getting listed on the market at a discount on Thursday. The stock is now overall nearly 27% from its IPO price.

Oil prices saw a correction sharply in the week with the Brent Crude Futures falling below $80/barrel. There has been a fall of nearly 11% in the last 11 days in US Oil prices.

There were new COVID restrictions in Europe after a fresh rise in cases, followed by riots against the same in the Netherlands. FTSE is down, however, the indices from France and Germany closed up for the week. 

Foreign Institutional Investors(FIIs) have net sold Rs 4,411 crore worth of equity shares in the week. But Domestic institutional investors(DIIs) kept up again and bought Rs 3,927 crores worth of shares during the week. For this month, FIIs have net sold nearly Rs 10,000 crores while DIIs have net bought for nearly the same amount.

Week Ahead

One major news that came out over the weekend is that Reliance and Saudi Aramco have withdrawn themselves from the potential deal in an O2C business. Reliance also withdrew the proposal filed before the National Company Law Tribunal (NCLT) to separate O2C business from the company.

This means that there will be no investment from Saudi Aramco into Reliance, which would have been the largest inbound investment in the Indian company’s history.

The controversial Farm Laws have been repealed after protests, ahead of the upcoming state elections. Let’s see how FMCG reacts as they were supposed to receive PLI upon enactment. 

It is the monthly expiry of Futures and Options in the Indian market this Thursday, and we may get to see volatile trading sessions.

Energy supply concerns ahead of winter in Europe.

SGX Nifty closed in the red yesterday, at 17,678.

NIFTY has supports at 17,750, 17,690, 17,500 and 17,375. There are resistances at 17,800, 17880, 17,950 and 18,000. 

BANK NIFTY has supports at 37,750, 37,500, 37,350, 37,000 and 36,500. Immediate resistances to watch out are 38,000, 38,350, 38,500 and 39,000.

The open interest data for the monthly options indicate that NIFTY might trade between 17,500 and 18,000 this week. A move outside this zone might trigger more movement in that direction. 

Bank Nifty data indicates consolidation around the 38,000 mark with a volatile week ahead.

Foreign Institutional Investors(FIIs) selling has sold heavily for almost all months since April this year. This does not give any confidence for the market which is now searching for a reason to take support and move back up.

Can BANK NIFTY take support at its Budget Week Highs? Will Relinace see a huge gap-down opening with news of the Saudi Aramco deal called off or has it already been factored in? Let us know what you think in the comments section of the marketfeed app.

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