Sensex closes in the red on apprehension ahead IIP, inflation data

Mr. Vivek Gupta, CMT - Director Research, CapitalVia Global Research Limited.
Nifty Future regained positive zone amid high volatility seen throughout the week as recovery was seen from lower levels on the back of short covering to close at one week high. Market breadth indicating the overall health of the market was quite weak. Banking and auto stocks led the recovery for key benchmark indices.

In overseas stock markets, there is uncertainty in global market on whether the US Federal Reserve's first interest rate hike in a decade will come at Fed's monetary policy meeting next week. A hike in interest rate in the US is likely to drain liquidity from emerging markets like India and redirect it to developed economies.

The IIP data will have a major bearing on the decision of the Reserve Bank of India (RBI) on the next phase of rate cuts during its upcoming monetary policy meet on September 29. Movement of index in near term will depend on CPI data to be announced on 14th September 2015 and the US Fed's policy-making committee holds a two-day meeting on 16th and 17th September 2015.

Nifty September Future gave closing at 7785.00 with weekly gains of 120.65 points.

Technically, in daily charts Nifty Future is looking weak and short term trend is down. A relief rally can be seen till nifty future is trading above the levels of 7660 for targets of 7900 to 7970, as bearish head and shoulder pattern's target is yet not achieved, it is expected to head southward as deeper correction up to 7400 - 7200 can be seen in short term. On down side immediate support level is at 7660. On the upside immediate resistance is at 7930 levels.

Source : Equity Bulls

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