Sensex, Nifty snap two-week gaining streak, ends 3.8% down this week; here’s what to expect next week

Staging a smart recovery from previous session’s losses, BSE Sensex and Nifty 50 ended up by more than 2 per cent on Friday. However, the headline indices ended this week down 3.8 per cent, snapping two-week gaining streak. BSE Sensex ended 835 points or 2.28 per cent at 37,389, while the broader Nifty 50 index ended at 11,050, gaining 245 points or 2.26 per cent. Index heavyweights such as Infosys, TCS, ICIC Bank, Reliance Industries and HDFC Bank contributed the most to the indices’ gain. The broader markets outperformed the frontline indices. The S&P BSE MidCap index gained 404 points or 2.90 per cent at 14,336.68, while the BSE SmallCap index jumped 2.31 per cent or 327 points at 14,495.58. “Indian benchmark indices showcased steady gains throughout the course of the trading day, before finally ending up by more than 2%; almost entirely recouping the losses in yesterday’s trade. This relief rally was in spite of mostly negative global cues and seemed to be based on the hope of more stimulus measures by the government,” said Vinod Nair, Head of Research at Geojit Financial Services.

Bajaj Finserv top-performer: All the 30 Sensex constituents finished their trade in the positive territory with Bajaj Finserv and HCL Tech as top Sensex gainers, up 6.64 per cent and 5.30 per cent, respectively. Among other Sensex gainers were Bharti Airtel, IndusInd Bank, L&T, TCS, ICICI Bank, ONGC and Infosys.

Nifty IT jumps 3.5%: The trend among the sectoral indices was positive. Nifty IT index was top sectoral gainer, up 3.46 per cent led by Coforge, HCL Tech, TCS, Infosys and Wipro. Nifty Auto index too jumped 3.38 per cent with Ashok Leyland, Exide Industries, Motherson Sumi Systems, Bosch and Eicher Motors as top index gainers.

What do charts suggest: “While the markets spent some time above the psychological level of 11000, the weakness in the index continues. The resistance on the upside is at 11300. Until that is not crossed, we cannot surmise that the short term bear trend has been completed and an upside rally will ensue. On the downside, the Nifty can fall to achieve the 10750 level,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.

What to watch out for next week: The key events to be watched out in the near future would be the covid-19 trajectory in India and abroad, progress on COVID-19 vaccine front and global market cues. “Stimulus measures, if any, in the US could provide support to the markets. If the market corrects from these levels, then investors should actively look for accumulating good quality stocks for long term wealth creation,” said Sanjeev Zarbade, VP PCG Research, Kotak Securities.

Two new IPOs to launch: The second-largest asset management company by assets under management UTI Asset Management Company (AMC) and state-owned defence firm Mazagon Dock Shipbuilders IPOs are scheduled to open for subscription from September 29 to October 1. UTI AMC price band has been fixed at Rs 552-554 per share. At the upper price band, this will translate to an issue size of Rs 2,160 crore. While the price band of Mazagon Dock Shipbuilders fixed at Rs 135-145 per share. The offer is expected to raise about Rs 444 crore at the upper end of the price band and at the lower range about Rs 413 crore.