The benchmark indices plunged on April 5 due to profit booking in HDFC and HDFC Bank that had surged by nearly 10 percent on Monday after the announcement of a merger deal. After a positive opening, the benchmark index traded with a negative bias for the whole day and showed profit booking from higher levels. Bank nifty settled at 38,067.90 levels, down by 1.47 percent in a day.
Among sectors, Nifty Auto, FMCG & Energy inched up by 1-1.5 percent each, while Bank nifty & Financial Services reduced 1.5 percent today.
At close, the Sensex was down 435.24 points or 0.72 percent at 60,176.50. The broader Nifty was down 96 points or 0.53 percent at 17,957.40. About 2,280 shares have advanced, 1,035 shares declined, and 97 shares are unchanged.
Among top laggards on the Nifty were HDFC Bank, HDFC, Bajaj Finserv, Reliance Industries and Kotak Mahindra Bank. Adani Ports, NTPC, Tata Motors, Power Grid Corporation and Tata Consumer Products were the major gainers.
Housing Development Finance Corporation (HDFC) and HDFC Bank that had led the stock market's rally on Monday, declined on profit booking. HDFC Bank slipped 2.60 per cent to Rs 1613.45. HDFC fell 1.63 per cent to Rs 2635.35. Both these stocks had gained nearly 10 per cent on Monday. The index heavyweight Reliance Industries Limited (RIL) was trading 1.40 per cent down at Rs 2625.70. Bajaj Finserv, Bajaj Finance, Kotak Bank, Wipro and Infosys were among the major Sensex losers.
ITC surged 2.06 per cent to Rs 260.60. Titan rose 1.59 per cent to Rs 2556.50. TCS was trading 1.30 per cent higher at Rs 3818.95. NTPC, HCL Technologies, Asian Paints, Hindustan Unilever and Nestle India were among the major Sensex gainers.
Palak Kothari, Research Associate, Choice Broking said, Technically, the nifty50 faced resistance from 18100 levels and showed downside momentum but it managed to close above its 50-days Simple Moving Averages indicates sustained above the same can show bounce back.
The index has taken the support from the previous horizontal line and closed above the same which indicates buyers are quite active. However, the momentum indicator MACD in trading with positive crossover on daily charts which indicates upside movement can be seen. Moreover, the index has managed to close above 21& 50-HMA sustained above the same can show northward direction. The Nifty may find support around 17800 levels while on the upside 18,150 may act as an immediate hurdle for the index. On the other hand, Bank nifty has support at 37,700 levels while resistance at 38700 levels.
Markets had rallied sharply in the last two sessions and outperformed other Asian peers, but the bears were back in action with investors preferring to book profit. Financial stocks, which triggered a massive rally in the broader markets a day before, emerged as the primary reason behind the fall in key benchmark indices, despite buying interest seen in auto and FMCG stocks, said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd. On intraday charts, the Nifty has formed a double top kind of formation which indicates further weakness from the current levels. The index has also formed a bearish candle on daily charts which is broadly negative. However, the medium term texture of the market is still on the positive side. We are of the view that as long as the index is trading below the level of 18,050, the correction could continue up to 17,850-17,750. A fresh uptrend is possible only after the 18,050 range breakout and could move up to 18,130-18,200.
Russia-Ukraine concerns persisted, capping the upside for the market, said Mohit Nigam, Head - PMS, Hem Securities. The market breadth was skewed in the favour of bulls. Crucial support for Nifty 50 is 17,800 while Nifty may face some resistance at 18,500.
Hurting sentiments were also spiking oil prices to $103 a barrel, said Prashanth Tapse, Vice President (Research), Mehta Equities Ltd. Investors also weighed the hawkish Fed expectations, in the face of the two-year and 10-year US Treasury yield curve inversion. The street is expecting the Fed to announce 50 basis point rate hikes at the May, June and July meetings. For Nifty, the support is seen at its 200 DMA at 17,100 mark with intraday support at 17,683 mark.
US stock index futures under pressure
US stock index futures came under pressure on Tuesday as the prospect of fresh sanctions on Russia kept investors on edge, while megacap growth stocks looked set to retreat after strong gains a day earlier. The European Commission is to propose to EU nations sweeping new sanctions, including a ban on imports of coal, rubber, chemicals and other products from Russia worth up to 9 billion euros ($9.86 billion) a year, an EU source told Reuters.
Rupee surges by 25 paise
The rupee continued its winning momentum on Tuesday, rising 25 paise to settle at 75.28 (provisional) against the US dollar, as the American currency and crude oil prices retreated from recent high levels.
Forex traders said weakness in the US dollar against its key rivals boosted investor sentiment, even as the domestic equities settled on a negative note.
Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities, said, USDINR spot closed 22 paise lower at 75.32, lowest levels since Feb28th. Exporter selling and lumpy corporates were major drivers of Rupee appreciation. With oil prices stable, Rupee is seeing some FPI inflows as well. Over this week there are two major events: US FOMC minutes on April 6 night and then on Friday is RBI MPC meet. We could see volatility increasing during the second half of this week. We expect a range of 75.00 and 75.80 on spot, over the near term, said Banerjee.
(With inputs from Reuters)