After a positive opening, the Nifty index wiped out its early gains and traded lower for the day. At close, the Sensex was down 555.15 points or 0.93 percent at 59,189.73. The broader Nifty was down 176.30 points or 0.99 percent at 17,646. About 1291 shares have advanced, 1754 shares declined, and 115 shares are unchanged.
Markets witnessed profit taking on the back of weak Asian market cues. All the sectoral indices settled on a negative note, while Nifty Metal was the prime laggard for the day. The negative opening of European markets and RBI’s three day meet to review monetary policy also exerted some pressure on the market today, said analysts.
Hindalco Industries, SBI Life Insurance, IndusInd Bank, JSW Steel and Tata Steel were among the major losers on the Nifty. Tata Consumer Products, ONGC, UPL, Britannia Industries and HDFC Bank were among major gainers.
Gaurav Udani, CEO & Founder, ThincRedBlu Securities said, "After making a high of 17,884 , Nifty closed negative at 17,646 down by 176 points. Such movements around the all-time high is not a good sign for traders in long positions. If Nifty is not able to close above 17,950 levels in the next few trading sessions, it may correct to its support range of 17,480-17,520," he said.
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities, said, "Nifty50 continues to remain in a medium-term uptrend – we expect 18,500 to be conquered going ahead. There is immediate support for the index at 17,640 while 18,000/18,200 is expected on the higher side. Metals are showing early signs of reversal, while the NBFC space is expected to remain in action. Midcap also remains in momentum with outperformance expected to continue."
Mohit Nigam, Head - PMS, Hem Securities, said, "Nifty Metal, Nifty Pharma and Nifty PSU were among the most affected sectors by today’s profit booking. Bosch moved against the trend in today’s market closing with a gain of 11.66 percent. After the Cabinet's decision to approve Rs.1,985 crore bonus for Railway staff resulted, there was a good up-move in all railway stocks. On technical front, the level of 17,830 can act as a good resistance and a strong support can be seen at 17,500 levels."
Sachin Gupta, AVP-Research, Choice Broking said, "Technically, on the daily chart, the index has formed a Bearish Engulfing candlestick pattern, which suggests some weakness for the coming day. Moreover, a momentum indicator Stochastic witnessed a negative crossover. In addition, on a four hourly chart the index has sustained below Middle Bollinger Band formation, which indicates further correction, but the overall trend is still looking bullish so every dip would be a buying opportunity for the fresh entry. At present, the index has immediate support at 17500 while resistance at the 17,800 level."
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said, "After the 17,775 support breakdown, selling intensified in Nifty stocks. On daily charts, the index has formed a long bearish candle which indicates further weakness from the current levels. However, as long as the index is trading above the 20 day SMA, the uptrend texture is intact. The texture of the market is volatile hence quick intraday correction from the resistance levels is not ruled out."
The Nifty has formed a lower top on a short term basis. It has also formed an engulfing top on daily charts which has bearish connotations, said Deepak Jasani, Head-Retail Research, HDFC Securities. "The weak advance decline ratio also suggests wide spread profit taking. Even if the global markets show some recovery, Nifty could after a small recovery again run into profit taking. Investors may take a part of their profits and raise cash, while traders can keep strict stoplosses and reduce their positions till the sentiment improves."
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