Markets slip for the second consecutive day. Here's what investors should do on Wednesday
Despite the government’s stimulus package to revive stressed sectors, markets continued to trade weak due to new Covid-19 outbreaks in Asia
The broader markets too reversed their gains with the BSE MidCap and SmallCap indices closing 0.42% and 0.07% lower, respectively.
On the sectoral front, only FMCG and pharma managed to extend gains with all other sectoral indices closing in the red.
As many as 493 securities hit the upper circuit and 261 the lower circuit; 417 hit their 52-week highs while 15 touched a 52-week low.
Among stocks, IOC, ONGC, Hindalco, Kotak Mahindra Bank and Coal India were among major losers on the Nifty. Top gainers included Power Grid Corp, Cipla, HUL, NTPC and Divis Labs.
Indian rupee ended marginally lower at 74.23 per dollar, amid selling saw in the domestic equity market. It opened lower by 9 paise at 74.28 per dollar against the previous close of 74.19 and traded in the range of 74.19-74.29.
Vinod Nair, Head of Research at Geojit Financial Services said, “Despite the government’s stimulus package to revive stressed sectors, domestic equities continued to trade weak due to new coronavirus outbreaks in Asia. Extension of emergency credit guarantee scheme to MSMEs and subsidised financing to small borrowers will be a boost to the microfinance and NBFC sectors. Amid a broad-based selling in the market, the healthcare sector managed to remain positive due to the extended government support.”
Here’s how experts see markets trading on Wednesday
Manish Shah, Founder, www.Niftytriggers.com
Nifty closed the day marginally lower. The index is lost for direction as Nifty is finding it difficult to break out of a resistance zone of 15900-15950. The stimulus package has failed to enthuse the market as there was no major reaction either positive or negative in Nifty.
If we draw an upsloping line from the lows of May 14, 2021, we see that Nifty has now touched this trendline. Also, a rising 20-period moving average is at 15,740 which could offer support to Nifty. The low for the day in Nifty is 15724. Thus, we have support from the rising trendline and a rising moving average. If the support at 15,700 holds and then Nifty could stabilise.
For Nifty to continue higher it needs a break above 15,900-15,950 Additional buying should be done only if this happens. On the lower side, the support is at 15,690-15,700 a break below this and the Nifty could see a decline to 15,590-15,580. Wait for a break above 15,900-15,950 to confirm the upside direction in Nifty.
Ashis Biswas, Head of Technical Research at CapitalVia Global Research:
The market witnessed a correction after a failed attempt to hold the support level around the Nifty 50 Index level of 15,800. The market suggests, 15,650 will be an important support level from a short-term perspective. Sustaining above 15,620-15,650 levels, the market expects to bounce back, and trade in the range of 15,650-15,900. The technical indicator suggests, a volatile movement in the market in the range of 15,650-15,900.
Chandan Taparia, VP, Analyst-Derivatives, MOFSL
The Nifty formed a bearish candle and negated its higher lows formation of the last three sessions. The index has to hold above 15,700 for an up move towards 15,900 and 16,000. On the downside, support can be seen at 15,600 and 15,500.
Rohit Singre, Senior Technical Analyst, LKP Securities.
On the hourly chart, the Nifty formed a small double top pattern that has a neckline of around 15,670. This level will be strong support for the index in the upcoming sessions. Any break below can lead to more selloff. The resistance is placed near 15,800-15,900, and a close above these can take the index towards 15,900.