Sensex, Nifty to extend losses further or will bulls return? 6 things to know before opening bell

Sensex and Nifty have now witnessed six day consecutive losses, which has led them to erase all gains made since July this year. Analysts believe that the rout could extend further with chartists predicting a fall to 10,150 levels in the coming weeks. For Friday, SGX Nifty was hinting a positive start, trading over 75 points higher. Benchmark indices have now slipped over 6% each this week alone. Renewed fear of the coronavirus re-emerging in Europe and other countries has spiked the worry of fresh lockdowns, to add to that uncertainty over the stimulus package in the US has also pulled equity markets lower. 

Global cues: On Thursday Dow Jones inched higher along with NASDAQ and S&P 500. Major European stock markets were still in the red while Asian peers on Friday morning were trading with gains. Hang Seng was up 0.50%, Nikkei 225, TOPIX, Kospi, KOSDAQ were all trading in the green.

Bulk and Block deals: 65,000 shares of Dixon Technology were sold by Max Life Insurance Company while over 64,000 shares of the same were bought by the US-based Vanguard Group. Over 49 lakh shares of Zee Entertainment Enterprises were bought by Integrated Core Strategies (Asia) PTE. 

FII and DII flows: Foreign Institutional Investors (FII) on Thursday were net sellers again, pulling out Rs 1,885 crore from equity markets while Domestic Institutional Investors (DII) were seen buying stocks worth Rs 188 crore. So far this week, FIIs have sold stocks worth over Rs 7,000 crore. 

F&O Expiry: The September series wiped out the entire gains of the last series and also paused the positive momentum of the last three consecutive series. “Nifty has seen a negative crossover on a weekly scale after 23 weeks which has Bearish implications for the market sentiment. In line with the weak market trend index continued its decline towards 10800 zones and recently corrected by 800 points. Index was fully in control of bears on the last few trading sessions of the September expiry as every small bounce was being sold,” said Chandan Taparia, Derivative & Technical Analyst, Motilal Oswal.

IPO watch: Angel Broking’s IPO was subscribed 3.95 times on the final day of bidding. Retail and Qualified Institutional Buyers oversubscribed their portion of the Rs 600 crore issue. However, Non-Institutional Investors subscribed to 69% of their quota. UTI AMC has also announced its IPO, which will open for subscription next week at a price band of Rs 552-554 per share.

RBI to conduct OMO: The Reserve Bank of India (RBI) will conduct purchase and sale of government securities through open market operations for an aggregate amount of Rs 10,000 crore. The RBI will conduct the OMO on October 1, where it purchases government securities of a longer tenure and sells shorter term government securities. “We expect the RBI will keep selling shorter dated securities and buying longer dated securities going forward in order to bring down longer term rates especially given that rates cuts are off the table in the near future given very high CPI inflation of 6.69% for August 20 which is well above the RBI’s comfort zone of 4.0%,” said Jyoti Roy, DVP- Equity Strategist, Angel Broking.