Nifty at a new high, aided by L&T and TCS; broader market outperforms!

Market Update at 02:29 PM:It’s turning out to be fabulous Friday for the Indian markets as Nifty logged a fresh all-time high. Nifty was seen trading up by nearly 0.41 per cent above the 16,700 mark.

Stocks like L&T, TCS and Ultratech Cement are helping the cause as they combinedly have added nearly 32 points to Nifty’s kitty. Meanwhile, the broader market indices were seen outperforming frontline indices with Nifty Midcap 100 and Smallcap 100 advanced by 1.03 and 0.69 per cent, respectively.

Market Update at 09:51 AM: After opening on a flat note, Indian key benchmark indices witnessed a sharp fall in the initial half an hour of trade, however, benchmark indices have recovered from the day’s low and were seen trading with modest losses. Sensex is down by 70 points while Nifty has shed 8 points.

The broader market indices continue to outperform with Nifty Midcap 100 and Smallcap 100 added 0.11 and 0.37 per cent, respectively.

Among sectoral indices, Nifty Metal is trading with gains of 1.39 per cent.

The August futures and option series turned out to be scintillating for Nifty as it advanced nearly 5.7 per cent. However, despite registering blistering gains of 5.7 during the August series, the mood on D-Street was disheartening and there were two key reasons: one was sheer underperformance by the broader markets and the second was the weak market breadth. The Nifty Mid-Cap 100 ended down by nearly 1.4 per cent while the Nifty Small-Cap index had plunged more than 5 per cent during the same period. Over-two thirds of Nifty 500 stocks declined in August, acting as a testimony of weak market breadth.

It was a dull expiry day as the Nifty moved in the range of only 80 points throughout the day as a result it has formed NR7 bar. Furthermore, on the daily chart, Nifty formed an indecisive candle on Thursday as a result, it led to the formation of back-to-back indecisive candles. Formation of back-to-back indecisive candles indicates indecision among the market participants ahead of the big event in the US. Market participants are clearly waiting for Jackson Hole Symposium to unfold and gain insights on asset tapering plans and economic outlook.

So, after a mesmerizing August series, we believe the September series would be bumpy ride for the markets. Why do we say so? From September onwards there would be implementation of the fourth phase of peak margin norms wherein clients need to have 100 per cent of the peak margin obligation available with the broker during the day and more importantly, on analysing the data for September we observe that only once has Nifty 50 managed to end the month of September in green since 2015.Hence, be watchful in September.

The level of 16,370 is likely to act as a strong support in the near term and on the upside, the level of 16,700-16,750 is likely to act as a resistance level.