Nifty, Sensex post notable weekly losses over caution on global interest rates

Mumbai, Aug 29 (IANS) Indian equity benchmarks posted notable losses for the third consecutive week amid concerns over global interest rates and geopolitical uncertainty.

Nifty declined 0.31 per cent during the week and added 0.35 per cent on the last trading day to reach 24,175. At close, Sensex was up 330 points, or 0.43 per cent, at 77,264. It lost 0.36 per cent during the week.

Analysts said that volatility surrounding the introduction of the Closing Auction Session (CAS) for F&O stocks also weighed on investor sentiment.

The monthly derivatives expiry witnessed sharp price movements during the closing auction, raising concerns regarding increased short-term volatility and price dislocations, particularly in heavyweight stocks.

Although markets recovered sharply on Friday, supported by strong buying in IT stocks following upbeat global technology cues, the benchmark indices remained under pressure.

Comments from the US Federal Reserve Chairman at the Jackson Hole symposium kept investors cautious regarding the future trajectory of interest rates, with markets increasingly assessing the possibility of a less accommodative policy environment.

Rising uncertainty around US inflation and bond yields could continue to influence foreign institutional flows towards emerging markets.

Sectoral performance remained mixed, with IT emerging as the strongest performer following renewed global technology optimism and encouraging Nvidia results. The Nifty IT index gained around 2.45 per cent during the week, while weakness in select banking and consumer stocks continued to weigh on the broader benchmarks.

Pharma and selected metal stocks also witnessed buying interest, while lower crude prices provided some relief to sectors sensitive to energy costs.

Crude oil prices, however, provided some relief during the week as Brent crude declined by over 4 per cent to around $88 per barrel as markets reacted to expectations of improved shipping conditions through the Strait of Hormuz.

Nevertheless, geopolitical risks remain elevated and any renewed disruption to energy supplies could quickly reverse the recent decline in crude prices, analysts noted.

The 24,000–23,800 zone remains the immediate support area for Nifty, while 24,300–24,400 remains the immediate resistance zone.

Immediate support for Bank Nifty is placed around 56,900–56,500, while the 57800-58000 zone remains the key resistance area, market participants said.

Investors closely track domestic GDP data and global economic releases likely to determine market direction. US employment data and August non-farm payrolls report are scheduled to be released on September 4.

—IANS

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