Today’s Market Summarised

Beginning of the fall for Nifty with morning power and an afternoon fall.

Nifty opened with a big gap-down at 17,451 and went up. After the gap-down was covered, the index found resistance at 17,620 and then a sharp fall was seen. NIFTY dropped more than 230 points from the day-high and closed near the day-low at 17,396, down by 188 points or 1.07%.

Bank Nifty opened the day with 37,362 with a gap-down and bounced up like Nifty. After finding perfect resistance at 37,800, the index fell more than 700 points by day closing. Bank Nifty closed the day at 37,145, down 666 points or 1.76%, right near crucial supports.

Nifty Metal(-6.6%) and Nifty PSU Bank(-4.1%) saw sharp sell-offs today. All sectoral indices except Nifty FMCG(+0.91%) closed in the red, with Realty(-2.1%) and Pharma(-1.8%) both closing over 2% down.

Asian markets which were open today closed in the red. European markets are trading well in the red currently.

News Picks

FMCG stocks featured in the top-gainers of Nifty 50 with small gains. Hindustan Unilever(+2.8%), ITC(+1.1%), Nestle(+0.73%) and Britannia(+0.81%) were among the only 7 gainers of Nifty. Marico(+1.3%) also closed with gains.

GMR Infra(+7.9%), PVR(+2.2%), Inox Leisure(+2.3%), Tata Elxsi(+6.2%) and ICICI Lombard(+1.5%) closed with significant gains in a bearish day.

Tata Steel(-9.5%), JSW Steel(-7.2%) and Hindalco(-6%) crashed sharply after GST Council approved increasing taxes from 5% to 18% on metals. Jindal Steel(-9.1%), National Aluminium(-8.9%), SAIL(-8.1%), NMDC(-7.7%) and many others also fell heavily in the day.

Hotel stocks closed with good gains in the day with hopes of economic re-opening. IndianHotel(+8%), EIH Limited(+3.1%), EIHAHOTELS(+6.2%), Chalet Hotels(+1.9%) closed in the green.

India VIX, or the Volatility Index jumped 15% to 17.49. Learn more about India VIX Here.

Markets Ahead

Nifty has now started the week with real bearishness, failing to sustain the morning gains. Many issues cloud the market gains.

The outcome of the Federal Open Market Committee (FOMC) meeting, which is scheduled on September 21-22 will be a critical factor going ahead.

The Evergrande issue which we discussed yesterday, with debts similar to the 2008 financial collapse caused a sharp fall in Asian markets. Profit booking from all-time highs is also being seen.

GST Council meet caused stock-specific movements in the metal industry as we discussed on Friday. India VIX rising to 3-month highs will also have to be watched.

Currently, the Dow Jones Futures are also trading 1-1.5% in the red. Markets in India may show a small bounce back tomorrow if the U.S. stays steady tonight.

The current bullish momentum in Bank Nifty has temporarily been paused. Still, the levels of 37,000 and 36,500 will act as supports for the index. Only below this can we can say that the index has become bearish.

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