Bulls vs bears on D-St: Is there more downside to Tuesday’s market fall?

Benchmark indices fell over half a per cent yesterday as analysts downgraded China’s GDP growth forecasts following a power crunch.

That apart, hardened bond yields also prompted investors to book profits in equities. The US Treasury yields topped 1.5% on Tuesday, the highest since June, while 10-year government bond yields, back home, climbed to 6.22%.

This, coupled with soaring crude oil prices, pushed the 410 points down at 59,668 while the index dropped 106 points to 17,749.

The indices had hit a low of 59,045 and 17,576, respectively, in the intra-day trade on Tuesday, but bounced back sharply amid gains in energy and metal stocks.

Now, according to tech charts, the medium-term bias remains positive as long as the index does not breach the 58,000 level.

Further, every bounce back above 59,500 may trigger an accumulating pattern for a bigger breakout.

As regards Nifty, the bullish outlook will remain intact as long as the support of 17,250 is held. Moreover, a breakout rally may take the index to the uncharted territory of 18,000 and 18,100 if it breaks above 17,800 decisively.

Against this backdrop, the immediate support of 58,600 for the Sensex and 17,500 for the Nifty will be tracked by market participants today.

On the fundamental side, the outcome of market regulator Sebi’s board meeting, stock-specific triggers, and primary market action will guide the on Wednesday.

The much awaited initial public offer by Aditya Birla Sun Life AMC will open for subscription today at a price band of Rs 695-712.

The fourth-largest asset management company in India looks to raise Rs 2,768 crore through an offer for sale by its two promoters.

Analysts recommend subscribing to the issue given the company’s reasonable valuations, strong return on equity, diverse product portfolio and well recognised promoter group.

Globally, investors will react to US Fed chairman Jerome Powell’s statement to the Senate Banking Committee, ECB President Christine Lagarde’s speech at the ECB Forum on Central Banking, and OPEC’s World Oil Outlook.

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