Indian markets took a breather during last week and fell after the previous week’s rally. The market started the week with a weak undertone and continued to observe selling pressure throughout the week on the back of week global and Asian cues.
On a week-on-week basis, the BSE Sensex lost 515 points or 3.06% to close at 16,810.81. The S&P CNX Nifty, on the other hand, finished the week at 4,997.05, down by 145 points or 2.8%. During the past week, inflation rose to 1.21%in the year through October 10, 2009, higher than previous week’s annual rise of 0.92%.
The Nifty has closed below the psychological 5,000 mark after moving above and below that level during the week. So, the question that arises here is whether the Indian market finally has started seeing the much anticipated downward correction. It may be very early to conclude that, as last week’s fall may be a result of simple profit booking. However, the important thing is, after testing some psychological levels, participants have also become very cautious. Most participants do not want to hold their positions at these levels. Thus, it has become more of a trading market. At this point, the 4,900 mark for the Nifty would be one important level to watch out for. A break of this strong support level could put further pressure on market sentiments. The market will keep a watch on RBI’s monetary policy to be held on October 27, 2009. The market expects it to be a non-event. Volume, on the other hand, has declined during last week’s trade.