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Markets pare early losses to end marginally lower; IT, auto stocks fall most

BSE midcap index fell 0.47 percent and smallcap index shed 0.87%

FPJ Web Desk | Updated on: Monday, May 02, 2022, 05:28 PM IST

Capital goods, auto and IT indices fell a percent each.
/Representative image | Photo credit: Twitter
Capital goods, auto and IT indices fell a percent each. /Representative image | Photo credit: Twitter
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The benchmark stock market indices started off a fresh month with sluggishness following global cues. Capital goods, auto and IT indices fell a percent each. However, some buying was seen in the FMCG, metal, power and realty names.

On the sectoral front, Nifty Metal and Nifty Media ended with marginal gains of 0.57 percent and 0.42 percent respectively while Nifty IT and Auto ended losing more than 1 percent each. INDIA VIX jumped 4.43 percent intraday settled at 20.28 indicating volatility going to stay in coming days.

At close, the Sensex was down 84.88 points or 0.15 percent at 56,975.99. The Nifty was down 33.40 points or 0.20 percent at 17,069.10. About 1,201 shares have advanced, 2,180 shares declined, and 175 shares are unchanged.

Among major Nifty losers were Apollo Hospitals, Eicher Motors, Titan Company, Bajaj Auto and Wipro. Among gainers were IndusInd Bank, Coal India, Tata Steel, Power Grid Corporation and HDFC.

The stock markets will be closed tomorrow (May 3) for Ramzan Eid.

Sumeet Bagadia said, throughout the day index traded in a tight range but at the end of the day banking stocks showed some recovery from intraday low, keeping the 17,000 level on the safe side. While NSE Advance Decline ratio closes at 0.48 percent suggesting maximum stocks remained at the selling side.

Sumeet Bagadia, Executive Director, Choice Broking said, On the sectoral front, Nifty Metal and Nifty Media ended with marginal gains of 0.57 percent and 0.42 percent respectively while Nifty IT and Auto ended losing more than 1 percent each. INDIA VIX jumped 4.43 percentintraday settled at 20.28 indicating volatility going to stay in coming days. "Coming to the OI Data, on the call side highest OI witnessed at 17,300 followed by 17,500 strike price while on the put side, the highest OI was at 16,800 followed by ,strike price. Closing above 17,300 would define a clear trend for taking a long position. At present, the index is having support at 16,900 followed by 16800 levels while resistance is placed at 17,300 levels. On the other hand, Bank nifty has support at 35500 levels while resistance at 36,800 levels.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said Early losses were mostly in reaction to the slump seen on Wall Street on Friday, but markets recovered most of its early losses as investors covered some shorts ahead of the trading holiday on Tuesday. The robust GST collections for April also calmed the nerves of investors, who are already facing the brunt of the ongoing war and volatile oil prices. Investors are also keenly awaiting the outcome of the US Fed's monetary policy announcement scheduled later this week. The Nifty is holding above the level of 16,800, but at the same time, it is failing to show a sustained momentum. In short, the market is consolidating within a broad trading range of 17,400 and 16,800. We may not see any trending move in the market unless it crosses the 17,400 level or breaks the 16,800 level. A close below the same will be negative for the market. Also, the volatility index is well above the 20 level, which is an indication that the market is about to break the trading range in the near future.

Prashanth Tapse, Vice President (Research), Mehta Equities Ltd, said the benchmarks were able to recuperate early losses as Nifty & Sensex eventually ended modestly lower, sparing the horror of a huge gap-down start triggered by weak global cues. Short covering was the order of last hour trade at Dalal Street where buying in Bank Nifty & Metal Index pushed the indices higher. However, Nifty IT Index underperforms. Technically, the line in the sand is at Nifty’s support at 16807 mark and below the same, the index could swiftly move to 16597 with aggressive inter-month targets at 14,251-14,500 zone. The index is likely to find strength only above 17,607 mark on closing basis. To affirm bullishness, Nifty needs to close above its 200 DMA at 17,233 mark.

Nandish Shah - Deputy Vice President Retail Research, HDFC Securities said, post gap-down opening on the back of weak overnight cues, Indian Markets recovered sharply and closed near day’s high. American market futures turned in to the green which also helped the sentiment. On daily charts, Nifty has formed double bottom around 16900 levels. Short term traders should hold Nifty longs with the strict stop loss of 16,824. Considering the choppiness in the current trend, any pull back rally can be utilized to lighten the long commitments. Trend of Nifty would be considered bearish unless it surpasses 17,414 resistance in the short term, Shah added.

Rupee ends flat against US dollar

The rupee pared initial gains to settle almost flat against the US dollar on Monday as subdued domestic equities offset the impact of a sharp decline in global crude oil prices.

A strengthening American currency overseas and continuous foreign fund outflows also weighed on the domestic unit, forex traders said.

At the interbank foreign exchange market, the rupee opened slightly higher at 76.48 against the American dollar and gained further ground to trade at 76.35. It oscillated between a high of 76.35 and a low of 76.51 during the session.

The rupee finally settled at 76.51 against the dollar, showing a marginal fall of 1 paisa.

US stocks futures edge higher as focus turns to Fed meeting

US stock index futures rose on Monday after closing out a rough April, as investors turned their attention to the Federal Reserve, which is widely expected to raise interest rates this week to curb a jump in prices. Bank of America added 0.6% in premarket trading to lead gains among the big banks, while megacap growth stocks were mixed after leading Wall Street to its deepest daily losses since 2020 on Friday, Reuters said.

(With inputs from Reuters, Agencies)

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Published on: Monday, May 02, 2022, 03:47 PM IST