New Delhi: Indian Equity Market Experiences Notable Decline Amidst Weaker Global Signals
India’s equity market faced a significant setback last week, breaking a three-week streak of consecutive gains. The Nifty Index fell by 1.52 percent, while the Sensex declined by 1.43 percent between September 2 and September 6. This drop was largely influenced by unfavorable global economic signals.
Global Factors Impacting Indian Markets
A crucial driver behind the decline was the weaker job data emerging from the United States, which heightened fears of a potential global economic slowdown. This concern was compounded by India’s increased weight in the MSCI Emerging Markets index, which has now surpassed China’s for the first time. With India’s valuation relatively high, this shift raises the risk of strategic weight reductions by index funds, impacting market sentiment.
Upcoming Economic Indicators and Market Outlook
The market’s trajectory will be shaped by several global and domestic factors in the near term. Globally, the upcoming Federal Reserve meeting scheduled for mid-September is drawing considerable attention. Analysts widely anticipate that the Federal Reserve may cut interest rates, which could influence market dynamics.
Domestically, the release of inflation figures for August by the government on September 12 will be closely scrutinized. Additionally, movements in the Rupee against the Dollar, fluctuations in crude oil prices, and trends in foreign portfolio investments (FPIs) and domestic institutional investments (DIIs) will be pivotal in shaping market sentiment.
Technical Analysis and Market Support Levels
Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd, noted a weakening trend in the Nifty Index. The index closed just above 24,850, which is considered an important support level. A breach of this level could see the Nifty Index potentially dropping to 24,000. The 24,600-24,450 range is identified as a critical support zone, while resistance is seen in the 25,000 to 25,200 range.
Similarly, Palka Arora Chopra, Director of Master Capital Services Ltd, highlighted that the Nifty Bank Index closed below 50,800 last week. The immediate support level is seen at 50,500; if this level is breached, the index could decline to 49,800. Resistance levels for the Nifty Bank are identified at 51,200 and 51,800.
