Markets to witness a rough Monday morning!

Indian markets recorded their biggest weekly drop since early May on the back of geopolitical tensions, declining global markets, and so on. Nifty dropped 2.69 per cent and Sensex declined 2.8 per cent in the last week.

With the start of a fresh week, the market participants hoped that the market will have a fresh start too but the early trend in SGX Nifty is indicating that the ‘Monday effect’ is likely to rule the markets. Monday effect is a theory which states that returns on the stock market on Mondays will follow the prevailing trend of last Friday.

SGX Nifty is trading with a cut of 50 points around 11,311. The level of 11,300 is very crucial for Nifty as support and breach or close below this support level would only mean that the bears are tightening their grip. So, it would be interesting to see whether the bulls hold on to the 11,300 support level or the bears, which are currently in the mood for vengeance, pierce through this level. The cues from the global markets and early indication from SGX Nifty indicates that the bears have an upper hand on Monday.

Asian indices are trading with negative bias on the first trading session of the week on the back of a negative close on Wall Street on Friday and concerns over rising US-China tensions after reports suggested that the Trump Administration is considering adding China’s largest semiconductor manufacturer to a trade blacklist. Japan’s Nikkei was down by 0.40 per cent, followed by Hong Kong’s Hang Seng and China’s Shanghai Composite which shed 0.22 per cent and 0.11 per cent, respectively.

It was a freaky Friday for the Indian markets as the key benchmark indices plunged just over 1.5 per cent. Nifty settled at 11,334 with a drop of 1.68 per cent with only two constituents ending in the green and the rest in red. Further, the broader indices were also not spared with Nifty Mid-cap and Small-cap losing 1.67 per cent and 1.16 per cent, respectively. All the sectoral indices ended in red as Nifty Metal and Nifty PSU Bank declined the most. India VIX jumped 7 per cent and closed above the 22-mark.

It was a roller-coaster ride on Wall Street on the final trading session of the week. After witnessing a sell-off in the first half of the trading session, the late-day recovery helped stocks to recoup their losses but still, it was a red day. The tech-heavy Nasdaq underperformed its counterpart as it slumped nearly 1.3 per cent, while Dow and S&P 500 dropped 0.6 per cent and 0.8 per cent, respectively. On the economical front, the unemployment rate dropped to 8.4 per cent in August and this was a clear testimony that the economic data has been improving steadily. European indices too ended in the red on Friday.