Markets pare gains to end flat; what should investors do on Tuesday?

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Indian benchmarks pared early gains to end flat on Monday as losses in IT and metals offset gains in banks, realty and auto stocks. The Sensex closed at 52,372.69, down 13.50 points, or 0.03%, while the Nifty was at 15,692.60, up 2.80 points, or 0.02%. The market witnessed a volatile movement and failed to breach the resistance level of 15800 on Nifty.

The S&P BSE midcap index rose 0.4%, and the smallcap index was up 0.75%, outperforming the benchmark indices.

UltraTech Cement, Grasim Industries, Shree Cements, JSW Steel and SBI Life Insurance were the top gainers on the Nifty. Top losers included Adani Ports, Bharti Airtel, BPCL, Tata Steel and Infosys.

Markets will react to the macroeconomic data, IIP and CPI inflation on Tuesday. The retail inflation, measured Consumer Price Index (CPI) slightly eased to 6.26% in June. Separately, the factory output, measured in terms of Index of Industrial Production (IIP), grew by 29.3% in May.

Here’s how experts see markets trading on Tuesday 

Chandan Taparia, VP, Analyst-Derivatives at MOFSL

The Nifty lost all its intraday gains and witnessed selling pressure in the second half towards 15,644 levels. It negated its lower high formation of the last three sessions but formed a Bearish candle on the daily scale.

Now, the index has to cross and hold above 15,750 to witness an up move towards 15,850 and 15,915, while on the downside, support exists at 15,600 and 15,500.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities

The choppy trend continued in the market and there is no respite for bulls, after showing upside bounce from the lower support (15635) in previous session. As long as the support holds, the odds of market bounce back remain alive for the next 1-2 sessions. A decisive move below the support is likely to extend weakness to 15500 levels. On the upside bounce, the area of 15800 could be a crucial resistance to be watched.

Ajit Mishra, VP – Research, Religare Broking Ltd 

Markets traded in a range and ended unchanged, extending the prevailing consolidation phase. Initially, the benchmark opened on firm tracking positive global cues however profit taking at the latter half trimmed all the gains. On the sectoral front, a mixed trend was witnessed. The broader indices continued their outperformance wherein both midcap and small cap ended higher by 0.4% and 0.7% respectively.