Daily Markets Wrap - Aug 20, 2021 - Mr. Deepak Jasani, Head of Retail Research, HDFC Securities

Downtrend in the Indian equity markets accelerated on Aug 20 following global cues. Nifty opened gap down in line with the losses in the Asian markets over Aug 20 and Aug 19. Attempts of intraday recovery did not sustain fully for long and the Nifty finally closed 0.71% or 118.3 points lower at 16450.5.

On a day when volumes on the NSE were higher than recent average, Metals, Capital Goods and Realty sectors fell the most. FMCG was the only gainer led by HUL. Midcap and smallcap indices fell close to 2% underperforming the Nifty. Advance decline ratio was the lowest since Aug 10.

Global shares fell for the fifth straight day and the dollar remained firm in a flight to safety on Friday as rising coronavirus cases compounded concerns over Chinese growth and the outlook for U.S. stimulus. The impact of China's new data privacy law, due to come into effect on November 1, weighed heavily on sentiment across the region. A slide in European shares halted on Friday, although the index was still on course for its worst week since February on signs of slowing growth, rising COVID-19 cases and fears of a sooner-than-expected tapering in monetary stimulus.

Nifty snapped a two week winning streak and ended lower by 0.48%. In the process it formed a doji like pattern on weekly charts suggesting indecision at higher levels. Over the week, FMCG and IT were the main gainers while Metals, Media, PSU Bank and Realty lost the most. Global worries (Fed withdrawing stimulus, Delta Variant spread, Slowing global growth and China's regulatory tightening) are impacting sentiments of investors in India. The broader market rally seems to be fizzling out. Nifty could remain in the 16540-16280 band for the better part of the coming week.

Source : Equity Bulls

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