Major negative for market is sustained FII selling

New Delhi, Oct 3 The major negative for the near-term will continue to be the sustained FII selling, which touched Rs 26,689 crore in the cash market in September, says V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

There are mixed cues for the October series, which historically has been a good month for markets.

The dollar index rising above 107 and the US 10-year bond yield at 16-year high of 4.68 per cent are major headwinds for the market since FIIs are likely to continue selling in response to the rising dollar and US bond yields, he said.

But, on the positive side, the bulls will be emboldened to buy on the back of the tailwind of the 5 per cent crash in Brent crude prices. Bullish DIIs and retail investors will lend support to the market. In the near-term these negative and positive factors can be expected to swing the market to and fro, he said.

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher, said Nifty staged a pullback recovery after the heavy erosion witnessed in the previous session from the 19,500 zone to touch the 19,720 levels during the intraday session to slightly improve the bias and ease out the panic sentiment to some extent.

Further ahead the levels of 19,500 would be crucial support zone whereas on the upside a decisive breach above 19,850 is necessary to overall improve the bias. The support for the day is seen at 19,500 levels while the resistance is seen at 19,750 levels, Parekh said.

BSE Sensex is down 381 points at 65,446 points on Tuesday. Maruti Suzuki is down 2 per cent in trade.