Optimism to greet markets on first trading session of September!
For the majority part of the month of August, the Indian markets were in a joyful mood with Sensex touching the milestone of 40,000 mark and even Nifty was also not too far from touching the 11,800 mark.
However, all of a sudden, the sharp sell-off of a single day i.e. the ‘Black Monday’ has led to a swift change in the sentiment of the D-Street, which was lively but is now filled with ‘Sturm und Drang’.
Moreover, the GDP numbers which came in after the market hours, indicate that it would only exaggerate the concerns as GDP contracted 23.9 per cent, its worst slump in decades. Having said that, SGX Nifty is indicating that the optimism is likely to greet the markets on the first trading session of the new month as SGX Nifty is trading up by 66 points at 11,431 levels.
The level of 11,300-11,335 is going to be very crucial support for the bulls as the 21-EMA is placed in this region, which has played the sheet anchor role for the bulls. Hence, once again, the onus would be on the 21-EMA level. However, with the new margin system coming into place from Tuesday, the situation is likely to get tricky and a bit more complicated and we need to see how traders and brokers adapt to the new margin system. Besides, Supreme Court’s AGR ruling is scheduled today, which is likely to keep traders on their toes. All in all, we are in for an exciting first trading session of this month.
Asian markets were trading subdued on the first trading session of the month of September; blame it on the mixed cues from Wall Street overnight. China’s Shanghai Composite and Japan’s Nikkei 225 were trading with gains of 0.05 per cent and 0.03 per cent, respectively while Hong Kong’s Hang Seng was down by 0.17 per cent.
The D-Street was filled with the hustle & bustle during the early morning trade as Sensex touched its important psychological mark of 40,000 and Nifty too was within a striking distance of touching the 11,800 mark. However, the news of escalating India-China tensions on borders triggered a thumping sell-off, which stunned everyone and the street was left with blood, sweat, and tears! As a result, it turned out to be a ‘Black Monday’ for the Indian markets where Nifty and Sensex plunged over 2 per cent. The broader markets were in for a deep dive with Nifty Mid-cap and Small-cap nose-diving 3.95 per cent and 4.75 per cent, respectively. Talking about the sectoral indices, all the indices were in red with Nifty Media, Nifty PSU Bank, and Nifty Pharma being the top losers. India VIX roared like a lion as it surged 27 per cent to close near 23 mark.
On Wall Street, the stocks wrapped up the final trading session of the month of August on a mixed note on the back of reports of a surge in new Coronavirus cases in some states of America. The tech-laden Nasdaq was the strongest performing index as it extended its recent gains and registered yet another record closing high. Meanwhile, Dow ended down by nearly 0.8 per cent and S&P 500 shed 0.2 per cent. For the month, Nasdaq was the outperformer as it was just over 9 per cent, followed by Dow and S&P which advanced 7.6 per cent and 7 per cent, respectively. Meanwhile, the European indices remained under selling pressure as German consumer price inflation came in cooler than anticipated, which initiated fresh anxieties about the country’s economic recovery.