Hi Readers, I am writing this market Update after a long time since Mar’19, the necessity now  has come to write about Nifty Index and its further moves. The reasons behind for the ongoing price correction are the major slowdown in the Domestic and Global Economy, especially the Trade war between USA and CHINA, both of them imposing and increasing the tariff rates in their imports & exports largely disturbing the Global countries, which has the direct impact on the Global Stock Market. The FIIs are pulling out the money from the Indian Equity market, which is evident on the data from the SEBI, they sold in the Equity market this year to till date Rs. 36971.80 Crores on a net basis and the USD against the INR also appreciated from $68.25 to $72.40.

We are not facing the Global issues alone, many more domestic issues are there to address such as the weakness in the Banking system and major slow down in Auto sectors, even the domestic demand slowdown seen in the FMCG sectors too. We are facing a major Economy slowdown, the recent Q1 GDP has come down to 5%, which is the lowest one in last 6 years. The domestic demand substantially coming down due to increasing in unemployment rates and closure of many ancillary units in Auto sectors and also major Auto makers halting their production, the recent comments from the Auto giant Hyundai said, this problem may persist for another 3 more years.

Though, the Union Govt taking several damage control exercises, to safeguard the Indian Economy, I have my own doubts, whether this stimulus will help the Indian Economy to thrive from here (or) will end up in the recession, the time only has to answer this question. Some positive signs seen in India Inc. in terms of profitability during Jun’19 quarter, we are in the profit zone on Quarter to Quarter basis by 55.40%, when compared with March’19 quarter. But, will it continue for ensuing quarter?, for this question we will have to wait  till 15th Sep and watch the Advance Tax figures closely.

By considering the above factors, the last hope for Nifty index lies at 10630-10550 any weakness below this level may tamper the Nifty Index up move and the weakness cum sell-off may drag the Nifty index till 10330-10000 very soon. I will not be surprised even the Nifty Index closes this calendar year, i.e. 31st Dec’19 on a negative note by 6-10%, when compare to last year close i.e. 10862.55. Further, I conclude this write up, by cautioning the traders/investors to exercise due care and book profit then and there and stay invested in low PE stocks in top Nifty 100 and some Midcap stocks too, with short to medium term perspective.