Nifty, Sensex end 1

Nifty, Sensex end 1.5% lower amid weak global cues; volatility to continue, stock specific action likely

Bears clutched Indian equity markets on Friday as benchmark indices continued to reel under selling pressure and ended ended with significant losses, tracking weakness in global markets. The BSE Sensex fell closed 866 points or 1.56% lower at 54,835, while the NSE Nifty 50 shed 271.4 points and settled at 16,366, down 1.63%. In broader markets, BSE midcap and smallcap indices fell 2% each. Among sectors, metal and realty indices fell 3% each and IT index down 2%. However, power index gained 0.5%. Central bank actions kept domestic and global markets under pressure this week and analysts expect market volatility to continue in coming sessions amid rising interest rate, elevated crude oil price and high inflation. Stock specific action can be expected based on quarterly results and management commentary, they said.Palak Kothari, Research Associate, Choice Broking

“Technically, Nifty has formed a Bearish candlestick pattern on a weekly chart which indicates selling pressure. Furthermore, the index has given closing below 61.80% Retracement level of its previous up move from 15671 to 18115 level which suggest more selling in upcoming sessions. Moreover, Index has been trading below the Neck line of Head & Shoulder Pattern which is a sign of bearishness in the counter. The index has been trading below 21*50-Days SMA indicating southward direction for upcoming session. However, the momentum indicators STOCHASTIC is trading with negative crossover on a daily charts which indicates downside movement can be seen. The Nifty may find support around 16300 levels, while on the upside 16600 may act as an immediate hurdle for the index. On the other hand, Bank nifty has support at 33800 levels while resistance at 36000 levels.”

Mohit Nigam, Head – PMS, Hem Securities

“Indian markets tumble on Friday after US and Asian markets decline. Nifty 50 closed 1.63% down while Sensex closed -1.56% down today. Metal, Realty and IT stocks faces huge selling pressure, however some buying was witnessed in power stocks. Yesterday BOE raised rates by 25 bps and raised concern over inflation which is the major trigger for the weakness. Today focus will be on US NFP data and unemployment rate. There might be further uncertainty in the markets due to a lot of global events happening. We believe Value investors may get decent opportunities to buy stocks at good valuations over next few weeks. Immediate support and resistance for Nifty are 16,200 and 16,800 respectively. Immediate support and resistance for Bank Nifty are 34,000 and 35,500 respectively.”

Amol Athawale, Deputy Vice President – Technical Research, Kotak Securities

“Markets were in southward direction right from the start of the trading session and selling intensified thereafter as rising crude oil prices reignited fears that inflation would pose a major challenge going ahead. The market is in a dilemma that in a rising interest rate scenario, a more hawkish stance by the RBI going ahead could hurt growth. On intraday charts the index is consistently holding a lower top formation that also supports short term weakness. For the traders, 16300 would be the key support level. However, a quick intraday pullback rally is not ruled out if the index succeeds to trade above 16300. Above the same, the pullback rally could continue up to 16550-16700. Below 16300, selling pressure is likely to intensify, and below the same the Nifty could touch the level of 16150-16000.”