Equity benchmark Sensex tumbled over 273 points on Tuesday, tracking losses in index majors Reliance Industries, Dr Reddy’s and Axis Bank amid a massive selloff in Chinese markets. Despite opening on a positive note, the 30-share BSE index turned red to end 273.51 points or 0.52 percent lower at 52,578.76, while the broader NSE Nifty fell 78 points or 0.49 per cent to 15,746.45.
The Nifty made a bearish bar today. After making a high of 15,881, it made a low of 15,701 and closed at 15,744. "Longs need to be cautioned. Any break below 15,580 will trigger Nifty to reach 15,500 and 15,400 levels. Nifty has a strong resistance in 15,880 – 15,920 range. Any bounce towards it should be used to book profits. Fresh longs to be considered only above 16,000 on closing basis," said Gaurav Udani, CEO & Founder, ThincRedBlu Securities.
Global stock markets declined on Tuesday as investors looked ahead to a Federal Reserve report for an update on when US stimulus might start winding down. London and Frankfurt opened lower while Shanghai and Hong Kong declined. Tokyo advanced. Investors awaited the Fed report Wednesday for signs of the central bank's level of concern about inflation and when it might start rolling back easy credit and other economic stimulus.
The Nifty Metal index closed in the positive territory for the fourth consecutive day. Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities Ltd, said, "The market undertone is expected to be range-bound as we are approaching the supports of the lower boundary (15,650/15,600). On the higher side, 15,810 and 15,900 would be resistance levels."
Sumeet Bagadia, Executive Director, Choice Broking said, "Technically, on the daily chart, the Nifty50 index has formed a long bearish candlestick and closed below the prior two days of lows. However, there is good support at around 15,650 levels, which is a 50-days SMA support. Overall, the nifty index is struggling in a range of 15,700-15,900 and either side breakout will decide the further direction. At present, Nifty is finding resistance around 15,900 levels while on the downside; support is intact at 15,600 levels."
The Nifty has formed a bearish Engulfing Top like pattern. It has repeatedly failed to cross the 15,962 level, said Deepak Jasani, Head-Retail Research, HDFC Securities. "With US Fed meet and F&O expiry over the next two days, we could see heightened volatility in the markets."
