Amid a highly volatile week, India’s benchmarks fell 1% each and broke a five-week uptrend amid mixed global signals, a stronger dollar and higher crude prices. However, buying by foreign investors provided some support to the downside.

For the week, the BSE Sensex lost 812.28 points (1.32%) to settle at 58,833.87, while the Nifty50 lost 199.55 points (1.12%) to settle at 17558.9. However, Sensex and Nifty are up more than 2% this month.

Among sectors, the Nifty Information Technology index fell 4.5%, the Nifty Pharma index fell 1.7%, and the Nifty Healthcare index fell 1%. On the other hand, the Nifty PSU Bank Index rose 4.4%. Last week, the small-cap index rose nearly 1%, the mid-cap index gained 0.6%, and the large-cap index fell 1%.

“Following global cues, the Nifty started the week poorly and gapped again on Tuesday. However, the market recovered some of its lost ground from the lows and consolidated towards the end, closing above 17,550 for the week. The line fell, said Ruchit Jain, the lead researcher at 5paisa.com.

The Nifty has recently bounced back without any meaningful correction, almost revisiting the 18,000 mark. However, the index appears to have entered a correction phase and closed the first corrective leg at 17,350 near the 20 DEMA. Over the past few sessions, the index formed a range, closing above the moving average support.

“The dollar index has resumed its uptrend, which is negative for emerging markets. Also, the momentum reading on the daily chart gave a negative crossover on the daily chart,” Jain said.

“The upside appears to be very limited in the short term, and if we break out of the 20 DEMA, which is now at 17,418, then these long positions in the August-September series could be unwound. So, before the market breaks the 17,800 and 18,000 hurdles again, we advised traders to avoid aggressive long trades.”

“On the other hand, a close below the 20 DEMA as mentioned above support could lead to the next decline, possibly extending to 17,100. Therefore, once this support is broken, traders should look for short-term opportunities. As mentioned above, FII positions, The dollar index, momentum readings on the daily chart and moving average support are likely to drive near-term momentum, so traders are advised to keep an eye on these factors,” Jain said.
Last week, foreign institutional investors (FII) bought shares worth Rs 4,503.6 crore, while domestic institutional investors (DII) sold shares worth Rs 5,033.2 crore.

So far in August, FIIs bought shares worth Rs 18,420.9 crore while DIIs sold shares worth Rs 6,555.99 crore.
“Equity markets remained volatile this week due to weak global cues. Inflation data and expectations of global central bank responses to inflation remain the main drivers of volatility,” said Dr Joseph Thomas, head of research at Emkay Wealth Management.

Market participants see volatile monetary policy leading to a recession in developed markets. The market will immediately take cues from the Jackson Hole seminar to gauge the pace of future rate hikes,” he said.

The BSE, Small Cap Index, rose nearly 1%, with 62 stocks up 10-33%, including Medicamen Biotech, Surya Roshni, Seamec, Indostar Capital Finance, Anant Raj, Kingfa Technology, HPL Electric & Power, Reliance Communications, Texmaco Rail and Engineering, Uflex, Lumax Auto Technologies and Shivalik Rasayan.

On the other hand, Tata Teleservices (Maharashtra), PNB Gilts, Hatsun Agro Products, Centrum Capital, Forbes Gokak, Patel Engineering Company, Gujarat Mineral Development Corporation, Sadbhav Engineering and APL Apollo Tubes fell 8-11%.

“Bulls and bears battle continued in domestic markets during the week as weak global cues continued and kept markets under pressure. A spike in European energy prices, an uncertain growth outlook, and rate hike fear ahead of the Jackson Hole rally kept global markets on their toes,” Contributes to Vinod Nair, Head of Research at Geojit Financial Services.

“Crude oil prices rose as Saudi Arabia hinted that OPEC+ supply may be reduced to address market instability. While Indian stocks are trading higher than other emerging markets, continued support from FIIs leads the domestic market.”

“While Nifty Bank appears to be the strongest segment, Nifty IT faces selling pressure as large companies scale back variable compensation due to margin pressure. The week ahead is filled with important macroeconomic data to help assess the economic strength,” he said.

The BSE 500 fell 0.65%, dragged down by Tata Teleservices (Maharashtra), Hatsun Agro Products, Mphasis, Adani Power, Hindustan Petroleum Corporation and APL Apollo Tubes.