Nifty Outlook for 3 August 2023

The overnight global news on Fitch downgrading US Bond ratings led to volatility in the global equity markets and thus, our markets too witnessed a sharp decline. Nifty opened with a gap down around 19650 and witnessed a sharp sell-off to sneak below 19450 mark. It recovered marginally from the lows and ended above 19500 with a loss of over a percent.

Nifty Today:

We witnessed a sharp sell-off as the global equity markets traded under pressure in Wednesday’s session. However, frankly speaking the correction in our markets was much expected as the Nifty was already in a consolidation phase since last few day’s while the midcap and the smallcap stocks kept rallying higher and these indices were in highly overbought zone. In our previous article, we had highlighted about a possible correction in the short in the midcap and the small cap stocks because of the overbought set up, and the global news of Fitch downgrading just became the trigger for this pullback. Also, the derivative data at the start of the August series is not much encouraging as the FII’s had rolled over lesser long positions in this series last week, and their Long positions are now around 51 percent which indicates lack of buying interest for now. INDIA VIX rose sharply by 10 percent as the markets turned volatile, but it’s a factor to worry about as long as it stays below 13-14. Now, the broader trend for the markets have not changes inspite of this correction and infact, we believe this correction would provide good entry points to buy stocks at lower levels. Thus, positional traders and investors should look for buying opportunities in this decline at lower levels.

      Markets corrects sharply led by global news flows

As far as index levels are concerned, the immediate support for Nifty is placed in the range of 19400 followed by multiple supports in the range of 19280-19240. On the higher side, 19650-19700 is the immediate resistance zone to watch out for.

Nifty, Bank Nifty Levels and  FINNIFTY Levels:

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