Sensex sinks 1% ahead of CPI inflation data; Nifty support seen at 16000, here’s what analysts have to say

Sensex sinks 1% ahead of CPI inflation data; Nifty support seen at 16000, here’s what analysts have to say

BSE Sensex and NSE Nifty 50 ended nearly 1 per cent down on Tuesday, amid nervousness in the global markets. BSE Sensex ended 509 points or 0.9 per cent to 53,887, while NSE Nifty 50 settled at 16,058. Stocks of index heavyweights such as Infosys, ICICI Bank, HDFC Bank, Housing Development Finance Corporation (HDFC), and Hindustan Unilever (HUL) contributed the most to the indices’ losses. Broader market outperformed equity frontliners. S&P BSE Midcap fell 0.5 per cent, while S&P BSE SmallCap index was down 0.52 per cent.

Rupak De, Senior Technical Analyst at LKP Securities

Palak Kothari, Senior Technical Analyst, Choice Broking

On the technical front, the Nifty has been trading with higher low & lower low formation from the last three day which suggest negative development on a chart formation. Furthermore, the Index has formed a bearish candle on a daily time frame which suggests bears are quite active. Nifty has taken support from 21HMA i.e., 16025 levels & given closing above the same which points breaching below the same can show more downside rally. On the OI Data, On the call side the highest witnessed at 16500 level & followed by 16200 while on the put side was at 16000 level followed by 15700. The momentum indicators Stochastic is trading with a negative crossover & bounced from overbought zone on a daily time frame which suggest southward journey in the counter. The Nifty may find support around 16000-15900 levels while on the upside 16260 may act as an immediate hurdle. On the other hand, Bank nifty has support at 34500 levels while resistance at 35500 levels. Overall, Stock specific moment has been observed sustained breaching below 16000 level can show more downward movement.

Vinod Nair, Head of Research at Geojit Financial Services

Rate hike fears are back in focus in the global markets ahead of the release of CPI numbers. Inflationary pressures along with strong US jobs data would keep the Fed on the path of aggressive rate hikes. On the domestic inflation front, retail inflation for the month of June is expected to be at 7.03%, maintaining the previous month’s levels. Demand concerns amid the rebound of virus cases in China compelled crude to trade lower.

Kunal Shah, Senior Technical Analyst at LKP Securities

The Bank Nifty index formed an inside bar candle on the daily chart which indicates the market is stuck between the range of 35,000-35,600. The undertone remains bullish as long as the mentioned support of 35,000 is held on a closing basis. The upside resistance if taken out will see a quick move towards the level of 36000 where the highest open interest is built up on the call side.