<p>Indian equity markets again fell this week after details on the government’s economic package failed to impress investors. Global markets were also under pressure this week over the concerns of prolonged economic weakness and more fiscal support needed. Even new outbreaks of the virus in South Korea and China and sobering warning from the WHO that the coronavirus may never go away dampened the sentiments.</p>.<p>For the week, both Nifty50 and Sensex were down 1.2%/1.7% respectively to close at 9,137/31,098 respectively. The overall market breadth was positive with Nifty Midcap100/ Smallcap100 up 1.6%/0.6% respectively. Sectorally it was a mixed bag. Banks, Financial Services, Pharma and IT dragged the market, as they were down in the range of 1.5-3%. On the other hand, Auto, Metals, and PSU Banks saw good recovery during the week. Foreign Institutional Investors (FIIs) were net sellers this week having sold equities worth Rs 5,950 crore while domestic institutional investors (DIIs) were buyers of equities worth Rs 1,075 crore.</p>.<p>The announcements made so far by the government on the Rs20-lakh crore package has focused majorly on the supply side. Investors fear that these measures may not result in a direct and immediate boost to demand, thus raising doubts over the country’s economic revival in the near term. Further, the spike in COVID-19 cases in the country also weighed on investor sentiment.</p>.<p>For now, the market seems to be focused on the global cues and is likely to remain under pressure as the relief measures announced by the government have not been able to boost sentiments. There is a fear of the second wave of pandemic spread and an extended period of the economic slowdown. Further, the earnings season and the management commentaries so far suggest more volatility and disruption in earnings ahead. In the near-term, we expect the market direction to depend upon the spread and intensity of COVID-19 cases, development around a COVID-19 vaccine, and global developments. Investors would also track the developments around the trade tensions between the US and China. On the domestic front, markets would now await the new norms of Lockdown 4.0.</p>.<p>Technically, Nifty has support at 9,000-8,800 zones, while on the flip side, the major hurdle is placed at 9,350 and then at 9,500 zones.</p>.<p><em>(The writer is the head of research at Motilal Oswal)</em></p>
<p>Indian equity markets again fell this week after details on the government’s economic package failed to impress investors. Global markets were also under pressure this week over the concerns of prolonged economic weakness and more fiscal support needed. Even new outbreaks of the virus in South Korea and China and sobering warning from the WHO that the coronavirus may never go away dampened the sentiments.</p>.<p>For the week, both Nifty50 and Sensex were down 1.2%/1.7% respectively to close at 9,137/31,098 respectively. The overall market breadth was positive with Nifty Midcap100/ Smallcap100 up 1.6%/0.6% respectively. Sectorally it was a mixed bag. Banks, Financial Services, Pharma and IT dragged the market, as they were down in the range of 1.5-3%. On the other hand, Auto, Metals, and PSU Banks saw good recovery during the week. Foreign Institutional Investors (FIIs) were net sellers this week having sold equities worth Rs 5,950 crore while domestic institutional investors (DIIs) were buyers of equities worth Rs 1,075 crore.</p>.<p>The announcements made so far by the government on the Rs20-lakh crore package has focused majorly on the supply side. Investors fear that these measures may not result in a direct and immediate boost to demand, thus raising doubts over the country’s economic revival in the near term. Further, the spike in COVID-19 cases in the country also weighed on investor sentiment.</p>.<p>For now, the market seems to be focused on the global cues and is likely to remain under pressure as the relief measures announced by the government have not been able to boost sentiments. There is a fear of the second wave of pandemic spread and an extended period of the economic slowdown. Further, the earnings season and the management commentaries so far suggest more volatility and disruption in earnings ahead. In the near-term, we expect the market direction to depend upon the spread and intensity of COVID-19 cases, development around a COVID-19 vaccine, and global developments. Investors would also track the developments around the trade tensions between the US and China. On the domestic front, markets would now await the new norms of Lockdown 4.0.</p>.<p>Technically, Nifty has support at 9,000-8,800 zones, while on the flip side, the major hurdle is placed at 9,350 and then at 9,500 zones.</p>.<p><em>(The writer is the head of research at Motilal Oswal)</em></p>