Profit-booking emerged after five days of gains. The Sensex fell 4.14 points or 0.01 per cent to settle at 36,971.09, while the Nifty 50 Index rose 6.95 points or 0.06 per cent to settle at 11,069.40. The broad market outperformed the benchmark indices, with BSE Mid-Cap rising 0.74 per cent and Small-Cap index gaining 0.81 per cent.
The interest rate sensitive stocks like auto were in the limelight after RBI cut repo rate by 25 basis points.
Auto stocks like Ashok Leyland (6.18 per cent), Bajaj Auto (3.03 per cent), Mahindra & Mahindra (M&M) (1.01 per cent), Eicher Motors (3.35 per cent), Hero MotoCorp (2.01 per cent), TVS Motor Company (2.83 per cent), Tata Motors (2.64 per cent), Escorts (0.04 per cent) and Maruti Suzuki India (1.3 per cent) gained.
The breadth of the market was positive as 1406 shares rose and 1146 shares fell. Mixed trend was witnessed on the sectoral front wherein media, auto and pharma posted decent gains while energy, PSU banks and infra stocks remained under pressure.
The Sectoral indices like telecom, healthcare, auto index were up 1.5-2.5 per cent outperforming the Sensex, while energy, utilities and power sector indices were down.
Analysts see 10,950 – 10,850 to be the immediate support.
A rate cut can have a medium-term positive impact on sectors that are likely to benefit from a neutral stance of RBI. Automobile, consumption, NBFC, and private banks are space where we should see some positive movement.
Technical Outlook
Sameet Chavan, chief analyst-technical and derivatives, Angel Broking said, “We remain upbeat and expect the Index to head towards 11,200 – 11,250 in next few days. Hence, any decline up to 11,000 – 10,970 should now be construed as a buying opportunity. Today, banking counters saw some profit booking; but, the structure remains positive and hence, we expect buying to re-emerge in this space soon.”
Mustafa Nadeem, CEO, Epic Research said, “Though traders should note the point of the rising window that has been seen on Wednesday. The important supports for this up trend are now placed at 10,970 - 10,980. As far as the market is above this and we see a positive move the trend is likely to remain intact.”
Market View
Jayant Manglik, president, Religare Broking, said, “We feel the positive trend of the benchmark Index alone can’t offset the damage. Traders have no option but to align their positions according to the trend and prefer Index majors to others. Also, advice opting options strategies instead of naked futures trade to handle volatility well.
Vinod Nair, head of research, Geojit Financial Services said, “Market turned volatile after the announcement of RBIs monetary policy as investors started booking profit from the recent rally. Market has gained well in the last one week by 5 per cent while 10,950 – 10,850 will be the immediate support.”
