It was a bad week at the markets and they fell quite sharply. Indian benchmark indices fell on all the five trading sessions and hit new 52-week lows in the process. These lows were made on Friday.

BSESENSEX lost 2,943.02 points or 5.42 per cent to close at 51,360.42 points while NIFTY lost 908.30 points or 5.61 per cent to close at 15,293.50 points. The broader markets saw BSE100, BSE200 and BSE500 lose 5.51 per cent, 5.5 per cent and 5.66 per cent respectively. BSEMIDCAP was down 5.31 per cent while BSESMALLCAP lost 6.67 per cent. A very interesting trend observed during the week was the fact that markets lost very sharply on Monday and Thursday and were marginally negative on the remaining three days.

The Indian Rupee lost 24 paise or 0.31 per cent to close at Rs 78.07 to the US Dollar. Dow Jones had a torrid week as well and lost on four of the five trading sessions. It made surprise gains on the day that FED raised interest rates and caught the short sellers by complete surprise. Dow lost 1,504.01 points or 4.79 per cent to close at 29,889.78 points. It also hit a new 52-week low on Friday of 29,695 points. Dow is now down 18.09 per cent on a year-to-date basis.

After very high inflation numbers in the US which were declared on June 10, a steeper rate hike was on the cards and the 75-basis points hike was the highest since 1994. The new interest rate band is between 1.5-1.75 per cent and it is almost certain that there would be another 75-basis point hike in the next FED meeting slated for the last week of July 22.

The Indian markets have also made new 52 week lows on the BSESENSEX of 50,921.22 points and 15,183.40 points on NIFTY. At present levels, BSESENSEX is down 11.83 per cent on a year-to-date basis while NIFTY is down 11.87 per cent. The comparison is clear between the US and Indian markets and that partially explains why FIIs or FPIs are in a sell-off mode in Indian markets. They are still making money even though they seem to be selling left, right and centre. Their total sales in the current calendar year stand at 2.67 lakh crore or 34.5 billion US dollars. This is in under six months. In the last 30 years that FII's have been in India, this is their highest sale ever.

This week we had no sectoral gainers in India and the sector to fall the least was BSEFMCG which lost 3.29 per cent. The one to lose the most was BSEMETAL down 9.60 per cent.

The primary markets seem to have gone into hibernation and there is no visibility of any IPO likely to happen in the current month. Maybe something does come up in July at best.

We have fallen to new levels and in the process have broken key support levels. While the markets in India are oversold, the sentiment continues to remain bearish. People are now talking of 14,000 levels on the NIFTY which would correspond to 47,000 on the BSESENSEX. While in reality anything can happen, the number seems too far away at this point of time. Expect markets to rebound in the coming week. This rebound could be technical in nature as markets are oversold. It could be a dead cat bounce as people refer such rallies. It could be because there is a respite in selling from FPI's or any other reason that could be attributed at the end of the day. But some recovery is imminent.

It makes sense not to remain on the short side in the coming week. Allow markets to rebound, even if it is just a short rebound. Let water or markets seek their own levels. The June series will expire on the last day of the month on 30th June and that is nine trading days away. The current level of 15,293.50 points is down 876.65 points or 5.42 per cent already. It needs to bounce before it decides where it would end at series end. Next big news would be the April-June quarterly results which are three weeks away and they may not be the best with commodity prices refusing to soften and buyers unwilling to pay higher prices. We are traversing tough times and probably the rain would bring some relief.

Simple strategy for the week ahead would be to exit shorts and allow markets to regain some lost ground. Expect global markets to join in the relief rally or pullback as the case maybe. Allow the markets to play out and take a call on shorting only towards the weekend again.