Weekly Markets Outlook - Sep 25, 2020 - Mr. Deepak Jasani, Head of Retail Research, HDFC Securities

Domestic shares tumbled across the board on Monday as dismal global cues and rising COVID-19 cases triggered profit selling. Investors sentiment was dented as rising coronavirus cases led to the possibility of fresh lockdowns in some European countries, which could further slowdown the pace of global economic recovery. Firmness in the U.S. dollar also put pressure on domestic shares. Friday witnessed a smart recovery from the losses of Thursday. The Nifty closed the week lower by 3.95% and Sensex fell by 3.8%. Markets ended lower on 4 out of the 5 trading days.

Broader markets underperformed the benchmark indices with BSE Midcap and Smallcap indices declining by 4.7% and 5.3% respectively. Market breadth was in favour of the losers with 3 shares falling for every 2 gaining shares.

Average cash market turnover on NSE was in line with previous week despite being an F&O expiry week as declining markets led to lower participation among investors. Among the sectoral indices Telecom index fell over 10%, followed by Media down by ~9.3%. Metal and PSU Bank index were down ~8%. There was no sector among the gainers with the IT index falling the least by ~1%.

Nifty ended the week with losses of almost 4%. The broad upmove and healthy advance decline ratio are encouraging signs for the upmove to sustain for the next few sessions. Traders could come back on the long side, though with some caution. On upmoves it can face resistance in the 11130-11180 band.

Source : Equity Bulls

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