market: Indian market may appear to be on steroids, but be careful now
However, around the second half of the session, the pressure on the stock markets eased as each thread of the story began to unravel. Concerns about China’s “Lehman moment” and its global ties were allayed as US junk bonds were visibly indifferent to the debacle, while the yields of their Chinese counterparts soared.
The injection of liquidity into the banking system worth $ 18.6 billion by the Chinese central bank also allayed some concerns. Even the Fed’s hawkish stance signaling a decrease towards the end of this year was in line with estimates already taken into account by the markets. In fact, the S & P500 ended their four-day losing streak after the FOMC announced.
All of these factors contributed to the continued rise in Indian stocks, with both benchmarks again hitting record highs this week. In addition, the return of FIIs after a five-month hiatus and buying support at each trough foreshadowed continued optimism in Indian indices. Thus, each trough now presents a good opportunity to deploy funds.
Event of the week
Over the past week, real estate stocks have defied gravity with the Nifty Realty Index which has jumped 21.22% this week alone. This optimism is not unfounded, given a sharp drop in mortgage rates, which fell to 6.5% as the end of the year holidays approach. Existing housing demand is expected to be further boosted by increased affordability and increased income with various new launches by developers adding to the already shrinking inventory.
In fact, despite the cancellation of stamp duty cuts in one of the country’s most expensive real estate markets, MMR, listings in August jumped 16% from August 2019 levels. to deal with other potential waves of Covid, some developers have adopted virtual tools to drive sales. Given the prevailing favorable winds, it looks like real estate stocks have rightly made a comeback. However, stocks have become overheated in the short term and investors must wait for prices to cool before taking long positions.
Nifty50 again closed the week in the green after hitting a new high at 17,947. As Nifty50 is trading at new highs Bank Nifty ended on a flat note and continued to struggle around its previous high historical. To maintain the bullish momentum, Bank Nifty will have to catch up.
The midcap basket gives signals of underperformance against the benchmark. Failure to decisively break past previous highs will be a sign of weakness for the overall market. Immediate downside support for Nifty is now placed at 17,600. Traders are advised not to create aggressive buyings at current levels, but to maintain a bullish bias and initiate buying in or around dips. immediate support.
The expectations of the week
The volatility seen in the market this week may now seep into the coming week as well, given the monthly expiration that falls towards the second half. With growing concerns about the chip shortage and the resulting reduced sales outlook, monthly auto manufacturers’ sales figures are sure to be eye-catching to determine future trends in auto inventory.
With no significant national economic data expected the following week, markets could be dominated by global news flows such as another possible default on interest payments on the Evergrande bond due next Wednesday. So, in today’s volatile market, investors should carefully invest only in fundamentally sound stocks, as the market remains fickle and unpredictable.
Nifty closed the week at 17,853, up 1.52%.