Market Wrap: Sensex, Nifty fall for 7th consecutive session; mid, smallcaps rise

Benchmark indices the Sensex and the Nifty ended in the red for the seventh consecutive session on September 29 amid weak global cues.

In the last seven sessions of losses, Sensex has fallen 5.5% while the Nifty has come down 5.6%.

The dollar’s continuous rise against its peers and fears of a long and deep recession due to aggressive rate hikes have eroded the risk appetite of investors across the globe.

Now, investors await the RBI MPC outcome which is expected to reveal a 50 bps rate hike. Commentary on growth and inflation will be the focus of market participants.

Sensex opened 400 points higher at 56,997.90 and traded in the green for some time, rising 568 points in intraday trade, before succumbing to profit-booking. It ended with a loss of 188 points, or 0.33%, at 56,409.96. The Nifty closed the day at 16,818.10, down 41 points, or 0.24%.

While the benchmarks suffered losses, the mid and smallcap indices outperformed and ended in the green. The BSE Midcap index closed 0.31% higher while the Smallcap index settled with a gain of 0.63%.

Shares of ITC, Dr Reddy’s Labs, Tata Steel and Sun Pharma ended as the top gainers in the Sensex index. On the other hand, Asian Paints, Tech Mahindra, Titan and Kotak Mahindra Bank ended as the top laggards.

On the sectoral front, BSE Power and Utilities fell over a percent each. However, Metal and Healthcare indices bucked the trend and ended over a percent higher.

“The market remained extremely volatile on the F&O expiry day, and traders preferred to cut their position in some of the rate-sensitives ahead of the credit policy announcement. The market is already in an oversold position. If the rate hike is above the estimate, then we could see bouts of intraday volatility with a negative bias for some more time,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

Crude oil prices saw an uptick; Brent Crude traded near the $90 a barrel mark. The rupee ended 8 paise higher at 81.86 per dollar.

Technicals

Palak Kothari, Senior Technical Analyst at Choice Broking underscored that the Nifty faced resistance at 200 DMA (daily moving average) and formed a bearish candlestick on the daily charts which adds bearishness to the prices.

However, the index has been trading with the support of 89 EMA (exponential moving average) and a sustained move above the same can show a pullback in the near term. On the open interest (OI) front, the highest Call OI was witnessed at 17,000 while on the Put side, it was at 16,500, Kothari said.

“The hourly momentum indicator RSI bounced from the oversold zone. A bullish divergence has been seen which points out some upside correction. The support for Nifty has shifted around 16,700 while on the upside 17,050 may act as an immediate hurdle,” said Kothari.

“Despite a solid start, the benchmark Nifty failed to sustain above the 200-day SMA (simple moving average) at 17,000. In the intraday time frame, the index has formed a double top formation and conversely it is consistently taking support at 16,800. As long as the index trades above 16,800, the chances of a quick pullback rally are bright. Above the same, the index could retest 16,950-17,000 levels. However, below 16,800, the index could slip till 16,700-16,650,” said Chouhan.

Key market data

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.