Markets snap four-day winning streak; what should investors do on Thursday

Indian equities snapped four-day winning streak and ended the session in the red on Wednesday. The Sensex ended 271 points lower at 52,502 while the Nifty fell 102 points to settle at 15,767.

Broader markets were also in the red for the day with the BSE MidCap down 1.1% and BSE SmallCap retreating 0.7%.

The Nifty Bank slipped 244.25 points to end just a tad above 35,000. Among other sectoral indices,  except IT and FMCG, all other indices on NSE ended in the red with metal index falling nearly 3% and infra index losing 1.2%

On the Nifty50 index, Tata Consumer, Nestle, ONGC, NTPC, and HUL were the top gainers while Adani Ports, Tata Steel, Hindalco, JSW Steel, and PowerGrid led the losses.

Power consumption in the country grew by 9.3% in the first half of June to 55.86 billion units (BU), indicating a slow recovery in commercial and industrial electricity demand, according to power ministry data.

Shares in companies controlled by Indian billionaire Gautam Adani fell again on Wednesday, adding to their losses stemming from a media report that said accounts of three foreign investor funds that own stocks had been frozen.

The companies involved had rejected the report earlier this week, calling it “blatantly erroneous.”

Overall markets remained under pressure throughout the day ahead of the key US Federal Reserve’s monetary policy meeting.

FOMC statement for June

The US Fed has raised inflation forecast and, for the first time, signalled higher interest rates in 2023. The Fed seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. As per the official statements, the Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.

The US Fed observed, “The path of the economy will depend significantly on the course of the virus. Progress on vaccinations will likely continue to reduce the effects of the public health crisis on the economy, but risks to the economic outlook remain.”

Here’s how experts see markets trading on Thursday

Chandan Taparia, Motilal Oswal Financial Services

Nifty formed a bearish candle on a daily scale and wiped out all the gains of the last few sessions. The index has to hold above 15,750 zones to witness an up move towards 15,900 and 16,000 zones while on the downside, support can be seen at 15,700 and 15,600 zones.

Manish Shah, Founder, www.Niftytriggers.com

Nifty closed the in the negative territory. Nifty failed to hold above the support at 15780-15800 and it traded below this support. With Nifty trading below this support the index could see some difficulty in moving higher in coming days.

The candle for the day was a long red candle that closed at the lows of the day. The range of the candle was fairly wide and this can be termed as a bearish candle.

Nifty could getting ready for a drop to 15600-15650 over next couple of days. Tomorrow is the last day of weekly expiry. Index is likely to stay below 15800 for the current weekly expiry