The markets continued the weak trend and closed in the red on Tuesday despite supportive global cues. Gains in IT and auto stocks were offset by weakness in banks stocks.
The Sensex fell 74.48 points or 0.20 per cent to settle at 37328.01, while the Nifty 50 Index fell 36.90 points or 0.33 per cent to settle at 11017. In the broader market, the S&P BSE Mid-Cap Index down 0.60 per cent and BSE Small-Cap Index shed 0.62 per cent.
The market breadth was tilted in favour of the sellers. On the BSE, 918 shares rose and 1,524 shares fell.
Technical View
According to experts, the Nifty opened marginally higher but failed to hold highs and showed profit booking after touching day high of 11076 zone and closed a day at 11017 with loss of 37 points forming a bearish candle on daily chart.
“In last 5-6 session Index formed tight range of 10900 on the downside and 11180 on the higher side, final direction will be clear only when Index will give either side breakout. Immediate support for nifty is coming near 10965-10900 zone and resistance is coming near 11080-11150 zone. The Nifty Bank closed a day at 27982 with loss of 204 points and formed bearish candle, support for Index is coming near 27740-27470 zone and resistance is coming near 28200-28400 zone,” Rohit Singre, Senior Technical Analyst, LKP Securities.
“The Nifty closed in the negative territory in the last trading session however It has managed to hold on to its uptrend line support that is formed on the daily chart, so till 10950-10900 range isn’t broken on the lower side we can expect the Index to bounce back towards the upper end of the range i.e. till 11100-11150 levels,” said Jay Thakkar, CMT Head Technical and Derivatives Research — AVP Equity Research, Anand Rathi Shares and Stock Brokers.
In the domestic markets, investors are pinning hopes on any stimulus/measures from the government to lift the sentiments. Meanwhile, sentiments seem to be improving in the global markets post announcement of stimulus measures by countries such as China and Germany.
Media reports suggested that a government panel on Monday recommended an across-the-board 25 per cent tax rate for both local and foreign companies and changes in personal tax slabs to benefit middle and upper middle class.
Market View
"Volatility continued in the market as investors remained risk averse due to uncertainties over economic growth. While, IT index outperformed given its defensive tag helping investors to tide over the volatility. Good monsoon, transmission of the rate cuts and effective measures by government will add some stability to the market,” Vinod Nair, Head of Research, Geojit Financial Services said.
Analysts continue to remain cautious on the markets in the near-term. “We recommend that investors should utilize the market correction to accumulate fundamentally strong stocks trading at attractive valuations,” said Ajit Mishra Vice President, Research, Religare Broking.
