F&O expiry day- Sensex gives up 59000, fresh uptrend in Nifty likely above 17700 breakout; what dragged D-St-

F&O expiry day: Sensex gives up 59000, fresh uptrend in Nifty likely above 17700 breakout; what dragged D-St?

BSE Sensex and NSE Nifty 50 ended 1.3 per cent down, each, on Thursday, a day of weekly F&O expiry. S&P BSE Sensex ended 770.48 points or 1.29 per cent lower at 58,766.59, and the NSE Nifty 50 settled 216.50 points or 1.22 per cent lower at 17,542.80. Index heavyweights such as Reliance Industries Ltd (RIL), Infosys, ICICI Bank, Tata Consultancy Services (TCS), and Housing Development Finance Corporation (HDFC), among others contributed the most to the indices fall. In the broader markets, S&P BSE MidCap and S&P BSE SmallCap indices ended half a per cent up. BSE MidCap index jumped 0.6 per cent or 146 points, and SmallCap index gained 0.5 per cent or 138 points to settle at 28,789.

Also read: India’s GDP growth to slow down in coming two quarters; rate hikes, recession fears, inflation among headwinds

Markets remained volatile during the week as benchmarks simply followed weak global cues and tanked over 1%. The dismal manufacturing data in Europe and Asia worsened the sentiment and reignited fears of slackening global demand. Markets failed to cheer the strong GST collections for August, as the hawkish Fed stance and the prospects of further rate hikes impacting growth going ahead continued to make investors nervous. Technically, 17450 would be the important support level while 17700 could be the immediate hurdle for the market. Below 17450, the Nifty could slip till 17350-17300. On the flip side, a fresh uptrend is possible only after the 17700 range breakout. Above the same, the index could move up to 17820-17850.

Rupak De, Senior Technical Analyst, LKP Securities

Nifty remained sideways during the day before ending 1% lower. After starting to gap down on the back of a weak global cue, the Nifty failed to recover fully and traded within a range for the day. The momentum indicator is in a bearish crossover indicating a bearishness. On the lower end, 17400 may continue to act as crucial support, below which the index may become weak again. On the higher end, resistance is visible at 17700.

Also read: Manufacturing continues to improve as new orders pick up; August PMI above 56 for 2nd month in a row

Vinod Nair, Head of Research, Geojit Financial Services

Domestic indices moved in line with peers while prospects of higher rate hikes, elevated inflation and a slowing economy put pressure on stock markets around the world. Although India’s Q1 GDP was reported below the RBI’s estimate of 16.2%, the strong growth seen in manufacturing activity during Q2 so far indicates a strong recovery in the domestic market. Additionally, ongoing support from FIIs will obscure the weakness, helping domestic indices to stay resilient.

Ajit Mishra, VP – Research, Religare Broking

Markets traded volatile and lost over one and a half percent, pressurised by weak global markets. After the gap down start, the Nifty oscillated in the range and finally settled at 17,542.8 levels. Mostly sectoral indices traded in tandem however buoyancy on the broader front kept the participants busy. Markets are showing tremendous resilience amid weak global cues and the recent consolidation should be seen as a breather, to digest the gains. We thus recommend continuing with the “buy on dips” approach. Banking, financials and auto top our list of preferred sectors while the underperformance from the IT pack may continue to hurt. Participants should align their positions accordingly.

Kunal Shah, Senior Technical Analyst, LKP Securities

The Bank Nifty index witnessed volatility throughout the day and ended negatively. After a gap-down opening, the index managed to hold the support of 38,800-38,500 on the downside, indicating the bias remains on the positive side. The immediate hurdle on the upside is placed at 39,500 and once taken out will see a sharp move on the upside towards 41,000 levels.

Deepak Jasani, Head of Retail Research, HDFC Securities

Nifty failed to build on to the large gains made on the previous day. Global sentiments have been able to halt the rallies in India over the past few weeks, though the broader market seems positive. 17696-17345 could be the band for the Nifty in the near term.