Markets snap 4-day winning streak; here's what investors should do
Investors should limit leveraged positions and maintain their focus on stocks selection and risk management, say experts
Indian benchmark equity indices snapped four-day winning streak on May 11 with Nifty50 closing below 14,900. Banking, financials and IT stocks buckled under selling pressure amid weak cues from Asian peers. The BSE Sensex settled 340.60 points or 0.7% lower at 49,161.81, while the Nifty50 slipped 91.60 points or 0.6% to end at 14,850.80.
Asian stocks tumbled as investors feared that soaring commodity prices that have sent the cost of raw materials from copper to iron ore to all-time highs may lead to higher inflation.
Among sectoral indices, Nifty Metal, Nifty Private Bank, Nifty Financial Services, Nifty IT and Nifty Pharma ended in the red, while gains were seen in PSU Bank, auto, media and realty indices.
The broader markets indices remained resilient to the market fall and ended higher. The S&P BSE MidCap and SmallCap indices gained 0.6% and 0.8% respectively.
Coal India, NTPC, IOC, ONGC and BPCL were among the top gainers on the Nifty. Losers included JSW Steel, Hindalco Industries, Kotak Mahindra Bank, HDFC and Divis Labs.
Among other buzzing stocks, we saw BHEL surging 14% to Rs 75.15, hitting a 21-month high on the BSE in an otherwise weak market. Alkyl Amines Chemicals zoomed 10% and hit a new high of Rs 3,640 on the BSE in intra-day trade on Tuesday after the stock turned ex-split today.
Here’s how experts see markets trading on Wednesday
Ajit Mishra, VP – Research, Religare Broking
Markets traded volatile and lost over half a percent, taking a pause after the recent rebound. The benchmark opened gap down following weak global cues on the back of rising concerns over inflation due to sharp rise in commodity prices. It made an attempt to recover losses as the session progressed but selling pressure in the latter half again pushed the index in the red.
Markets reacted to the global fear of rise in inflation which might trigger the rate hike earlier than anticipated. On the benchmark front, Nifty has been struggling to cross 15,000 mark for the last two months and is witnessing the slide again after reaching almost to that zone. However, we feel the downside could be capped this time due to the existence of support around the 14,600 zone. Having said that, participants should limit leveraged positions and maintain their focus on stocks selection and risk management.
Manish Shah, Founder, www.Niftytriggers.com
Nifty closed the day marginally lower for the day but the highlight of the day was a sharp bounce of the lows . Nifty gained by a close to a 100 points from the low of the day.
The barrier at 15050-15000 is acting as a tough resistance zone as repeated attempts to surmount this peak is rejected by strong selling pressure. The zone at 15000-15050 needs to get surpassed for the rally to resume to higher levels.
Nifty held above the support of 50 period moving average. Currently the average is at 14737. If we see Nifty break below this average. There could be a decline to 14570-14550. For Nifty to move higher it is imperative that it breaks above 15000-15050. Tomorrow is the weekly expiry. It could again be a low volatility play on the weekly expiry day. Individual stocks could still thrive in this lack lustre phase seem on Nifty.