Sensex, Nifty fall for 6th day straight ahead of monthly F&O expiry; Rupee at new low, Nifty support at 16800

Sensex, Nifty fall for 6th day straight ahead of monthly F&O expiry; Rupee at new low, Nifty support at 16800

BSE Sensex and NSE Nifty 50 settled in red for the 6th straight day on Wednesday, one day ahead of weekly and monthly F&O expiry. BSE Sensex plunged 509 points or nearly 1 per cent to 56,598, while NSE Nifty 50 crashed 0.9 per cent or 149 points to settle at 16589. Also, Indian rupee ended at a record closing low of 81.94 per dollar on Wednesday. Index heavyweights such as Reliance Industries Ltd (RIL), HDFC Bank, ITC, Housing Development Finance Corporation (HDFC), Axis Bank, and State Bank of India (SBI), among others contributed the most to the indices’ fall. Broader markets too fell in line with equity frontliners. S&P BSE Midcap index fell 0.5 per cent or 166 points to end at 24438, while S&P BSE SmallCap index lost 0.4 per cent or 120 points to settle at 27871.

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Investors continue to be sceptical of the domestic market’s higher premium amid the ongoing global deceleration while foreign investors are fleeing emerging economies in search of safer havens. Although the domestic economy is buoyed by solid fundamentals, the stock market’s appetite for risk has been hindered by the rising worries of a worldwide recession. Domestic investors are turning to IT and pharma companies, which have been in a consolidation phase for the past year and are now gaining from the INR depreciation. The RBI policy meeting is currently underway, and the central bank is likely to raise repo rates by 35-50 basis points, however, the inflation outlook may soften in reaction to declining commodity prices.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

Markets remained choppy with a sharply downward bias, as investors exited banking and metal stocks ahead of the monthly F&O expiry with the likely rate hike by the RBI & other central banks indicating that bearish sentiment could continue going ahead. Technically, we are of the view that 17000 would act as an immediate resistance level. Below which, the correction wave is likely to continue till 16700-16650. On the flip side, a short recovery rally is possible only after the dismissal of 17000. Above the same the index could move up to 17100-17200. The Nifty is having major support between 16700-16650 (which is important retracement support level). Buying is advisable in index heavyweight stocks if Nifty falls to 16700 levels.

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Mohit Nigam, Head – PMS, Hem Securities

Investors should remain cautious ahead of RBI’s monetary policy meeting later this week. A 50 bps interest rate hike is expected from RBI. On the technical front, immediate support and resistance in Nifty 50 are 16800 and 17200 respectively. Immediate support and resistance in Bank Nifty are 37250 and 38750 respectively.

Ashwin Pal, Senior Technical Analyst, Mandot Securities

We are expecting high uncertainty and very high volatility in the upcoming sessions on the back of weak global cues, fear of recession, and other important upcoming events. Investors and traders are advised to remain calm and patient in intraday trading. On Wednesday, Nifty settled at 16858.60, with major support levels at 16700-16500 and major resistance at 17000-17180. Nifty Bank ended at 37759.85, with major support levels at 37400-37180 and resistance levels at 38000-38300.

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