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See Nifty at 9000 by Budget if global mkts stablise: Udayan

Indian equities witnessed profit booking on Friday with Nifty closing below the 8250 level weighed down by oil and mining stocks. Even global markets have been under pressure.

Udayan Mukherjee feels the markets have been trading at fairly important support levels right now around that 8200 level on the Nifty and it should have held out had it not been the “additional burst of global turbulence”.

Indian equities witnessed profit booking on Friday with Nifty closing below the 8250 level weighed down by oil and mining stocks. Even global markets have been under pressure.

He sees Nifty under pressure from two heavyweights – upstream oil and IT. “The serious medium term support is still between the 7700 and 7800, which we did not violate in the last correction,” he said. He does not see the index breaking that level unless there is mayhem in global market.

Udayan sees a bounce back in markets from the current levels in the first quarter of next year and does not rule out Nifty at 9000 by the Union Budget if global markets stabilize.

Below is the transcript of Udayan Mukherjee’s interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.

Sonia: There has been a slowdown in the market globally in the last one week. Do you expect to see more given that the news flow is only negative? 

A: There is a little bit more to go particularly with how the markets closed on Friday in the US. We are trading at fairly important support levels right now, around that 8200 level on the Nifty and it should have held out had it not been for the additional burst of global turbulence but that comes under threat this morning. 

It is difficult to say where the Nifty stops falling particularly because it is under strain from two heavyweight clusters, upstream oil and IT and both those clusters might drag the index a bit more. So, it is difficult to say, maybe we get dragged down to that 8000 psychological level if we break conclusively below 8200 and close there. I think there are serious medium-term support is still that cluster between 7700 and 7800 which we did not violate the in the last correction. I think that has emerged as a fairly significant level. 

We are fairly far away from it but having lost about 400 points on the Nifty already that is the absolute solid support which the Nifty probably will not break unless there is mayhem in global markets throughout the rest of December. So, maybe a little bit more to go but it depends now on where global markets settle and whether we do go down all the way to sub 8000.

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