Sensex, Nifty end in red for second day straight; are bears making a comeback on Dalal Street?

For the second day straight, domestic stock markets closed with losses. S&P BSE Sensex ended 337 points lower at 49,564 while the Nifty 50 index was at 14,906 on the weekly F&O expiry. Index heavyweights such as HDFC Bank, ICICI Bank, and Reliance Industries Ltd were among the top contributors to the day’s losses. Metal stocks were also among the drags. Only the Nifty PSU Bank index and the Nifty Realty index closed with gains. India VIX, the volatility gauge, was inched higher on Thursday and closed the day with gains. 

Vinod Nair, Head of Research at Geojit Financial Services- 

“Domestic market witnessed selling due to lack of further domestic cues and weak global market.  Wall Street has extended its losses as US treasury yield and dollar index jumped post the release of a watchful Fed minute, which was below the expectations. Fed minutes signalled a plausible slowdown in bond buying “at some point”, a shift in policy in the future, which will have an implication on EMs.”

Mohit Nigam, Head PMS, Hem Securities-

Benchmark Indices closed on a negative note mostly led by Metal and Banking stocks with Nifty Metal closing at -3.21% and Nifty Bank at -1.04%. Equity benchmarks extended losses, in line with Asian peers, as traders weighed Fed minutes that flagged the possibility of asset purchases. Metal stocks are witnessing profit booking after China said it would strengthen its management of commodity supply and demand to curb unreasonable increases in prices. Fertilizer stocks gained after the government decided to increase the subsidy for DAP fertilizer from Rs 500 per bag to Rs 1200 per bag, which is an increase of 140%. Immediate support and resistance are intact at 14,800 and 15,000, decisively crossing 15,000 level can bring fresh high for Nifty 50.”

Rohit Singre, Senior Technical Analyst at LKP Securities –

“Index showed profit-booking pressure second day and given closing at 14,906 with loss of nearly one per cent & formed a bearish candle for the second consecutive day. It seems the index has to retest its descending channel breakout zone if turned right then we may see a good pull back from current levels towards the immediate hurdle zone of 15,000-15,100 but if the index fails to sustain some more profit booking can be seen towards nearest support zone of 14,850-14,775.”

Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments –

“The psychological level of 15,000 has proved to be a stiff resistance for the index. We reacted quite sharply and fell over 100 points. However since 14,700 is held on a closing basis, the overall market trend remains bullish. If we break 14,700 there will be a reason for concern as if we disrespect that, we could slide down to 14,400. On the upside, there is still room to achieve a target of 15,300-15,400. All dips or corrections can be utilized to enter long positions.”

Manish Shah, Founder, Niftytriggers –

“Nifty closed the day marginally lower as it declined to fill the gap that caused it to move beyond the resistance at 15,000-15,050. Next week is going to be expiry week and it will be interesting to watch how the market pans out. Nifty is now touching the rising trendline coming up from the lows of March 2020. This trendline has acted as a support to the falling index whenever it has touched it. Nifty has already broken above the resistance at 15,000-15,050 and obviously, there has been no follow-up to the rising prices. For the rally to continue Nifty needs to break above 15,050 which could mean a rally towards 15,450-15,500. The support zone for Nifty is at 14,750-14,700. If Nifty trades below 14700 the breakout fails and we will see a grind between 15,050-14,300 for some more time.”