Equity benchmarks the Sensex and the Nifty ended lower for the fourth consecutive session on July 14 tracking weak global cues.
European shares fell as investors remained cautious, thinking the US Fed will continue hiking rates aggressively after the latest US inflation print. US inflation prints jumped 9.1% year-on-year in June, posting the largest increase since 1981.
Rate hikes and sticky inflation has aggravated worries that the US economy may see a recession going ahead which is bound to affect other economies also.
Even though many economists believe India is in much better shape on the macroeconomic front, India cannot completely decouple from the global trends.
The dollar's strong rise against its global peers also hurt the market even as crude oil prices fell further on recession fears.
Brent crude traded below the $100 a barrel mark while the rupee ended 24 paise lower at 79.88 per dollar.
After opening in the green, Sensex fell prey to profit booking and ended 98 points, or 0.18%, lower at 53,416.15. Nifty closed the day 28 points, or 0.18%, lower at 15,938.65.
In the 30-share pack Sensex, only 12 stocks managed to close in the green. Shares of Sun Pharma, Dr Reddy's Labs, Kotak Mahindra Bank, Maruti Suzuki and Titan ended as the top gainers while those of Axis Bank, HCL Tech, SBI, Tech Mahindra and TCS ended as the top laggards in the Sensex index.
"Tracking weak cues in global markets, Indian indices gave away their initial gains amid concerns over higher-than-expected US inflation data. Investors are increasingly expecting the Fed to carry out a minimum 75bps rate hike this month in order to combat high inflation. On the domestic front, India’s WPI inflation moderated in June although it remains at the elevated levels, but is expected to ease further during the year," said Vinod Nair, Head of Research at Geojit Financial Services.
Among the sectoral indices, BSE Midcap closed 0.40% lower while the Smallcap index fell 0.56%. Among the sectoral indices, BSE Oil & Gas index rose 1.65%, followed by Energy (up 1.13%) and Utilities (up 1.02%).
On the flip side, BSE IT and Teck indices fell 1.44% and 1.14% respectively.
IT stocks have been under pressure after some of them reported their June quarter numbers. Many brokerage firms and analysts believe that the IT companies may see some pressure on the margins and the demand scenario may take a hit due to a recession in the US.
Some IT stocks, such as TCS, HCL Tech, Wipro, Birlasoft and Mphasis hit their 52-week lows in intraday trade on BSE.
Technicals
Rupak De, Senior Technical Analyst at LKP Securities observed that the Nifty corrected towards the lower band of the rising channel before closing a bit off the day's low. On the daily chart, the index has remained below the important moving average. The daily RSI is in a bearish crossover. On the lower end, the index may find support at 15850-15875. On the higher end resistance is visible at 16100, said De.
Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities pointed out that Nifty is placed near the upward sloping trendline support, adjoining the lows of 20-June and 21-July 2022.
"After fall of almost 400 points, Nifty is now near the support of 15,800-15,900 range, where option writers have written Put options. Immediate resistance is placed around 16,100 levels, followed by 16,275 levels, he said.
Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in said Nifty ended the day with an
indecisive formation which resembles a Spinning Top. However, with a decisive breach of near-term support, the trajectory of the index is looking down.
"As Nifty has approached its key 20-day moving average, whose value is placed around 15,800, some buying support may emerge as the index is already down for the last four trading sessions. In that scenario, bulls can make a pullback attempt but strength shall not be expected unless it closes above 16,070," said Mohammad.
"A strong close below 15,800 can confirm the resumption of the larger downswing with initial targets placed around 15,183. For the time, as the index has neared its support levels, it looks prudent to remain neutral," he added.
Disclaimer: The views and recommendations made above are those of individual analysts not of MintGenie.
