Informist, Friday, Sep 22, 2023

By Akshata Gorde

MUMBAI – Benchmark equity indices are likely to remain weak next week, and rely on global cues for direction, analysts said. The Nifty 50 index is expected to find support at 19400-19500 points, and face resistance at 19800 points. 

Market participants are likely to react to the US flash purchasing managers' index readings for manufacturing and services activity for September, due later today.

Today, the Nifty 50 and the 30-stock Sensex settled 0.3% lower each at 19674.25 points and 66009.15 points, closing in the red for the fourth consecutive session. 

The Nifty 50 hit the day's high of 19798.65 points as the market was "oversold", said Anshul Jain, senior technical analyst at Lakshmishree Investment and Securities Ltd. He added that a similar bounce-back might be seen on Monday, amid expectations of a weak market next week.

Along similar lines, Amol Athawale, vice-president of technical research at Kotak Securities Ltd, said in a note, "The Nifty (50) has formed a long bearish candle, indicating a weak sentiment in the near future. However, due to temporary oversold conditions, we could expect a quick pull-back rally in the near future."

Heavy call writing was seen in out-of-the-money options of the Nifty 50 index expiring next week, suggesting a bearish outlook among traders for the near future, said Anshul Jain. However, losses are likely to be limited next week as most index heavyweights saw healthy corrections today, said Osho Krishan, technical and derivative analyst at Angel One Ltd.

Among sectors, information technology stocks could see buying if indices fall next week, said Anhul Jain. Meanwhile, shares of fast-moving consumer good companies and pharmaceutical companies are expected to remain weak. 

"Going ahead, recovery in the banking and financial majors would be critical for any meaningful rebound, else the corrective tone would continue," Ajit Mishra, senior vice-president of technical research at Religare Broking Ltd, said in a note.

Key support for the Nifty Bank index is seen at 45000 points, surpassing which the index may slip to 44300-44000 points, said analysts. Today, the Bank Nifty index closed flat at 44612.05 points.  End

Edited by Avishek Dutta

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