The previous week saw markets rise on the first two days of the week before falling on the final three. The selling pressure was intense, and the losses at the conclusion of the week were significant.
The BSESENSEX down 741.87 points, or 1.26 percent, to 58,098.92 points, while the NIFTY fell 203.50 points, or 1.16 percent, to 17,327.35 points. The BSE100, BSE200, and BSE500 all lost 1.21 percent, 1.25 percent, and 1.23 percent, respectively. BSEMIDCAP fell 1.12%, while BSESMALLCAP down 1.23 percent. On Friday, the midcap and smallcap sectors suffered rapid selling and value degradation, which did not represent what the index lost.
The Indian rupee, like other foreign currencies, came under pressure when the Federal Reserve boosted interest rates. The rupee fell by Rs 1.25, or 1.57 percent, to settle at Rs 80.99 per US dollar. The Dow Jones reached a fresh 52-week low of 29,250 points. Dow fell 1,232.01 points, or 4%, to close at 29,590.41 points. The Dow gained only one day this week and lost the remaining four.
On predicted lines, the Fed lifted interest rates by 75 basis points. The new rate band is currently 3.00-3.25 percent, and the FED expects to have an interest rate of roughly 4.4% by the end of calendar year 2022. Two further sessions would be held in November and December. This rate increase would have an effect on credit card debt, auto loans, mortgages, and variable rate loans. This would certainly affect the average American, who normally lives on credit card spending and EMIs.
There are no major difficulties to deal with this week. We should start seeing some movement during the first week of October. Harsha Engineers International shares, which have been heavily subscribed, will be launched on the bourses on Monday, September 26th. The issue received 74.7 subscriptions. This is a record under the new standards that go into effect on September 1st and require ASBA or funding blockage on the same day. This was done to avoid a significant number of applications being returned since their money would not be banned.
This leads us to SEBI's fascinating observation and action point. With money being blocked during the bidding period, there is no reason for shares to list on the sixth working day following the issue's closing. It should happen by the fourth day, saving two days in the cycle. This would limit price manipulation after the issue was closed, as well as aid to reign in wild speculation. I hope SEBI takes this issue up for discussion at its next meeting, which is scheduled at the end of September.
The RBI will convene for its monetary policy meeting between the 28th and 30th of September. A rate raise is on the way, but the amount is still up in the air. Given that every Central Bank in the world that has convened has hiked interest rates, anticipate the RBI to do likewise in the region of 40-50 basis points.
September futures expire on Thursday, September 29th. The series reached a peak of 18,096 points a week ago, while the series reached a low of 17,291 points last Friday. The series is now down 195.10 points, or 1.11 percent, at 17,327 points. Another way to look at the series is that the losses from last week are what the series is down by, as the series had been called quits before to last week. Markets are expected to remain choppy and unpredictable as the series concludes in four days.
There will be uneasiness and considerable volatility in the markets in the next week. The Dow has reached a new low, and the RBI policy meeting and impending rate rise will be a drag on markets. Immediate support is available at 17,150-17,200 on NIFTY and 57,600-57,750 on BSESENSEX. If this is breached, the next level of support is at 17,000 and 57,150 points. Resistance exists at the locations 17,650-17,700 and 59,100-59,250. The previous week's high was the most powerful resistance at 18,100 points and 60,676-60,700 points. With the quarter drawing to a close this week, anticipate people to start talking about outcomes the next week.
The plan for the upcoming week, which includes expiration and an RBI meeting, would be to avoid carrying forward holdings at the conclusion of the day. People would expect a bounce in the DOW after two weeks of straight steep losses. If that happens, it will have an impact on our markets as well. While FPIs have been sellers in the previous three sessions, they have stayed mostly neutral in September, with net sales of Rs 2,445 crore so far. On sharp rallies, sell and accumulate on declines. The risk-reward ratio would favour purchasing on strong falls.