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It was an erratic week for the Indian equity market where the Nifty and Sensex managed to end on a flat note after wild swings on both sides. Indian equity markets are outperforming most of their global peers and trying to show resilience despite weak global cues. There is not much on the domestic front to digest therefore the direction of global markets will play an important role in the direction of our market. The flows of FIIs will also be critical because they are still not selling in the cash market despite weak global markets, a rise in the dollar index and US bond yields however a sharp fall in crude oil prices amid global slow-down worries is acting as a tailwind for our market. On the global front, European Central Bank (ECB) will announce its interest rate decision on 8th September 2022.
FIIs are not selling in the cash market but they are hedging themselves in the F&O market by short positions amid global uncertainties because their short positions in the index future jumped to 81%. If global cues turn positive then these shorts may help in a short-covering rally. Put call ratio stands at 1.04 which is neutral for time being whereas the India VIX is hovering around 200-DMA and if it moves above 200-DMA then we can expect a jump in volatility in the coming days.
Technically, 17800-18000 is acting as an immediate supply zone; above this, we can expect a move towards 18350/18600 levels. On the downside, 17400-17300 will be an immediate demand zone while 17160-16920 is a sacrosanct demand zone to buy any dip.
Bank Nifty is outperforming however 39500 is acting as an immediate and strong hurdle; above this, we can expect a move towards 40000/40500 levels. On the downside, 38800 is an immediate support level then 38250-37950 will be the next demand zone.
Mr. Santosh Meena, Head of Research, Swastika Investmart Ltd.
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(This story has not been checked by Kashmir Bulletin and is auto-generated from other sources)
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