Markets continued to fall and the only saving grace was that it was a shortened four day week. They fell on all four days of the week. This was the eight consecutive weekly loss for the benchmark indices. The last positive week was 3rd to 7th August, which means two months. BSESENSEX lost 1,871.31 points or 2.53% to close at 72,010.13 points while NIFTY lost 682.10 points or 2.95% to close at 22,446 points. BANKNIFTY lost 1,129.65 points or 2.03% to close at 54,450.75 points. The broader markets saw BSE100, BSE200 and BSE500 lose 3.08%, 3.14% and 3.20% respectively. BSEMIDCAP lost 3.65% while BSESMALLCAP was down 2.64%. BSEIT was the sole sectorial gainer up a tad at 0.20%. The top loser was BSEAUTO down 5.51%. Sensex and NIFTY highs were made on Monday while the lows were made on Thursday. The levels were at 73,740.85 and 23,080.25 points for the highs while the lows were at 71,292.88 and 22,217.30 points respectively.

The Indian Rupee lost 43 paisa or 0.45% to close at Rs 96.41 to the US Dollar. Dow Jones lost on three of the five trading sessions and gained on two. Dow Jones lost 651.66 points or 1.26% to close at 51,176.96 points.

September NIFTY futures expired on a weak note. The series loss was a massive 1,576.30 points or 6.5%. The series closed at 22,683.75 points. By all standards this was a big losing series.

Primary markets continue unabated. We had seven mainboard listings last week. With this number we have now seen as many as 30 listings in September which is a record by itself. Further the new documents that are now being filed on the main board have a fair number of IPOs where the combined size of fresh issue and offer for sale are in the Rs 100-200 crore mark. Readers would recall that last year we had seen a trend where companies were trying to raise Rs 150-200 crores from the SME platform. Why this change? Time and SEBI regulations will answer. On the point of main board IPOs, 8 out of 10 documents have repayment of debt as the primary objective. Wonder if capacity expansion has stopped in the country or companies do capex with borrowed money and then do an IPO for repayment. Or, is it that SEBI asks for too many details in capex.

The week ahead sees RBI meet for its policy review meeting between the 5th and 7th of October. It is widely believed that at its meeting repo rates would be raised by a minimum of 25 basis points to 5.50% from the present 5.25%. Global central banks have been raising rates and inflation has become a cause for concern. Rising inflation in the US is also a cause for concern and it is believed that the FED may raise rates again at its next meeting to be held on 28th of October. How the markets in India take the expected rate hike would depend on the commentary as well.

Markets broke through 22,800 points on NIFTY and took support at 22,200 points or slightly higher at 22,217 points, low made on Thursday. This level would continue to act as support for the coming week. If this were to break, the next support is at levels of 21,650-21,750 points. On the upside, resistance is at 22,800 points. In Fibonacci, the number 8 is a crucial number and trends change on this number more often than not. With eight weekly losses having already happened, I would bet on a turnaround this time, even if it is only to break the trend. What could lead to that, one would have to wait for the week to unfold.

The trading strategy would be to buy on any sharp dips as the Fibonacci number is a very strong indicator of a turnaround however short, happening this week. Sell on any strong rallies. Geo-politically as we get closer to Election Day in USA, Trump may like to call of the war suddenly as well to seek a positive mandate. Too many ponderable and a possibility of a turnaround. Play for the event with a stop loss.

Trade cautiously.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)