Are markets showing signs of reversal after hitting 56,000 on Sensex?
Overhang of rising probability that the US Federal Reserve may soon start withdrawing its liquidity support
Domestic equity market benchmarks BSE Sensex and Nifty 50 snapped a four-day winning streak on Wednesday, a day of weekly F&O expiry. After hitting record-high levels intraday on August 18, the market settled marginally lower due to profit booking in sectors like banking and financials, metals, and select auto stocks. BSE Sensex fell 163 points from Tuesday’s close to end at 55,629, after hitting a new record high of 56,118. While Nifty 50 index gave up 16,600 levels, despite surging to 16,701.85, a fresh all-time high.
Going forward, Indian equity investors may have to brace themselves for a sharp gap down opening on Friday following weakness in US indices as they reacted to the rising probability that the US Federal Reserve may soon start withdrawing its liquidity support that has, in part, helped fuel an astronomical rise in financial assets across the world.
Here’s how experts believe Markets will trade on Friday
Ashis Biswas, Head, Technical Research, CapitalVia Global Research
The market saw some correction from higher levels of 16,700. For the short-term, it is crucial that the Nifty sustains above 16,500.
Early signs of reversal in the market with deviation occurring in Nifty 50, Nifty midcap, and Nifty smallcap. Traders should refrain from building a new buying position until further improvement in the market breadth.
Rahul Sharma, Co-Founder, Equity99
For August 20, the Nifty will have immediate support at 16,500 followed by 16,450-16,375. On the upside, 16,700 will act as resistance.
The Nifty Bank, which underperformed the Nifty, lost more than 400 points to closed at 35,554.50. It has immediate support at 35,300 and if it slips, then 35,000-34,850 will be the next support.
On the upside, 35,800 will be the hurdle above which 36,000-36,200 will act as a resistance level.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
The index faced some selling pressure and gave up its gains. However, the trend continues to remain positive and traders should use corrections to accumulate long positions.
The Nifty has good support at 16,400 and the momentum will continue to be strong and bullish until the index closes below this level