Weak global cues ahead of the US inflation data influenced sentiment back home as the headline indices the Sensex and the Nifty ended in the red on July 13. With this, the market extended losses into the third consecutive session.
US inflation prints are due later today which is in the focus of investors as it will signal if the US Fed can proceed with more aggressive rate hikes while the economy is flashing signs of a looming recession.
Sensex ended 372 points, or 0.69 percent, lower at 53,514.15 with 16 stocks in the green and 14 in the red. Nifty50 closed the day 92 points, or 0.57 percent, lower at 15,966.65.
Shares of Hindustan Unilever, Asian Paints, Kotak Mahindra Bank, Sun Pharma, NTPC and Nestle ended as the top gainers while those of IndusInd Bank, Bharti Airtel, HDFC, HDFC Bank, Reliance Industries and TCS ended as the top laggards.
“After witnessing volatility in the first half, markets moved in the southward direction in the last hour of the trade as weak global indices dampened sentiment. Despite the sell-off in recent sessions, investors are trading cautiously and not taking long bets amid recession worries in the west that could dent demand. Also, China's decision to impose restrictions to combat virus spread is also creating nervousness amongst the investors," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
BSE Midcap index rose 0.32 percent while the smallcap index closed 0.04 percent up. Among the sectoral indices, BSE Power, Utilities, Energy, Oil & Gas and Telecom indices fell up to 2 percent.
"The market opened with a gap up but failed to surpass the intraday resistance of 16150. On daily charts, the Nifty has formed a bearish candle and after a long time closed below the 50-day SMA level. A fresh pullback rally is possible only after the Nifty crosses 16000 and above the same, the index could move up to 16100-16150 levels. On the flip side, a correction wave is likely to continue if the index trades below the 50-day SMA or 16000. Below the same, the Nifty could slip up to 15900-15850 levels. Contra traders can take a long bet near 15850 with a strict support stop loss at 15800,” said Chouhan.
Technicals
Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in pointed out that Nifty50 closed below its critical support at around 16,000. Hence, in the next trading session if bulls fail to defend 15,950 then the index shall continue its weakness towards its 20-day simple moving average (SMA) whose value is placed around 15,780 and a close below it may signal the resumption of the larger downtrend.
"In the next trading session, owing to the weekly expiry if the index manages to recover and registers a close above 16,000 then a sideways trend can be expected. For time being trade appears to be on the short side for a target of 15,800. Nifty may see strength if it closes above 16,150," said Mohammad.
Brent crude traded near the $100 a barrel mark while the rupee ended 3 paise lower at 79.63 per dollar.
Disclaimer: The views and recommendations made above are those of individual analysts not of MintGenie.
