Equity barometer Sensex ended in the red after six consecutive sessions of gains on August 4, dragged by losses in energy and financial heavyweights, including Reliance Industries, ICICI Bank, SBI, HDFC twins, Axis Bank, Kotak Mahindra Bank and NTPC.
However, gains in shares of Infosys, Sun Pharma, Nestle, TCS and ITC capped the losses, helping the benchmark end flat.
Sensex opened in the green but witnessed profit-booking as the day progressed. At one point, the index was down 773 points.
However, it pared losses smartly and ended just 52 points, or 0.09%, lower at 58,298.80 with 16 stocks in the green and 14 stocks in the red. Nifty closed with a nominal loss of 6 points, or 0.04%, thanks to positive global cues.
Investors now await the RBI MPC meet outcome which is due on August 5. A rate hikes in the range of 35-50 bps is widely expected. RBI's commentary on inflation and growth will also be in focus.
“Profit-taking finally came into play after six-session gains ahead of the RBI's policy meet outcome on August 5. Key indices pared most of their losses towards the end as strength in other Asian and European indices aided sentiment," Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, observed.
While the benchmark index closed in the red, mid and smallcaps ended in the green. BSE Midcap index rose 0.29% while the Smallcap index ended 0.25% higher.
Among the sectoral indices, BSE Telecom fell 1.14% while the Realty pack fell 1.11%. BSE Healthcare rose almost 2% while IT, Teck and Metal indices rose more than a percent each.
More than 100 stocks, including Mahindra & Mahindra, Adani Enterprises, Adani Power, Adani Transmission, Blue Dart Express, Eicher Motors, INOX Leisure, Indian Hotels Company, MRF and PVR, hit their 52-week highs in intraday trade on BSE.
Crude oil prices remained lower amid concerns over demand while a build in US crude and gasoline stocks. As Reuters reported, in the previous session oil prices had fallen to almost six-month lows, after US crude and gasoline stockpiles unexpectedly surged last week and as OPEC+ said it would raise its oil output target by 100,000 barrels per day (bpd).
The rupee fell 31 paise to close at 79.47 amid concerns over the widening trade deficit.
"Taking positive momentum from the robust US economic data, the domestic market opened with gains, while worries over the US-China conflict kept investors on the defensive, leading to heavy volatility. Weak PMI and trade deficit data witnessed downside pressure on the Indian rupee & equity market. However, sustained foreign interest in Indian equities is led to buying on dips, resulting in late recovery," said Vinod Nair, Head of Research at Geojit Financial Services.
Technicals
Chouhan pointed out that Nifty formed a bearish candle, indicating some sort of indecisiveness between the bulls and bears.
"The index has support at 17,250 and below the same, it could slip till 17,150-17,100. A fresh breakout is possible only after 17,450 and could move up to 17,560-17,600 levels,” said Chouhan.
Palak Kothari, Senior Technical Analyst at Choice Broking highlighted that the Nifty has taken support from the horizontal line as well as the 200-day moving average on the daily chart which suggests buyers are active.
Nifty has faced resistance at a physiological level of 17,500 and crossing this level is very important for further rally.
"Nifty closed above 61.8% Fibonacci retracement of its previous down move from 18,630 to 15,160 i.e. 17,308 which indicates strength for upside. On the open interest (OI) front, on the call side, the highest OI was witnessed at 17,500, followed by 17,600, while on the put side, the highest OI was at 17,000," said Kothari.
"Momentum indicator MACD was trading with a positive crossover on the daily timeframe which suggests strength in the counter. Support for Nifty has shifted around 17,150 while on the upside, 17,500 may act as an immediate hurdle," she added.
Disclaimer: The views and recommendations made above are those of individual analysts and not of MintGenie.
