Headline indices the Sensex and the Nifty ended in the red for the second consecutive session on September 15 amid mixed global cues.
Sensex opened 107 points higher at 60,454.37 but failed to hold gains and slipped into the red soon. The index finally closed 413 points, or 0.68%, lower at 59,934.01. The Nifty50 ended the day with a loss of 126 points, or 0.70%, at 17,877.40.
Mid and smallcaps ended in the green, outperforming the benchmarks. The BSE Midcap index settled higher by 0.31% while the Smallcap index inched up by 0.06%.
Shares of Tech Mahindra, Infosys, IndusInd Bank, Bajaj Finserv, Tata Steel and Axis Bank ended as the top laggards in the Sensex index. On the other hand, Maruti Suzuki, Power Grid, NTPC and HDFC ended as the top gainers in the index.
Among the sectoral indices, BSE Power rose 2.06%, followed by the Utilities index which rose 1.99%. On the flip side, IT, Teck, Metal and Realty indices ended at over a percent lower each.
Mixed global cues failed to lift the mood back home. Investors appear to be cautious in anticipation of a more aggressive rate hike by the US Fed next week as inflation remains at higher levels despite rate hikes in the last few policy meets.
"Fears of a recession in the global economy exacerbated selling pressure in IT and pharma stocks. Mid and small caps are expected to continue their trend in the short to medium term as they are trading reasonably well compared to large caps and at a discount to their historic valuation," said Vinod Nair, Head of Research at Geojit Financial Services.
"Globally, in light of the elevated inflation in the US, investors are on an edge, assessing the possibility of a higher magnitude of a rate hike in the next Fed policy meeting," Nair added.
Nearly 240 stocks, including ICICI Bank, Maruti Suzuki, NTPC and SBI, hit their 52-week highs.
Crude oil prices remained lower as the benchmark Brent Crude traded below the $95 a barrel mark. The rupee ended lower by 26 paise at 79.70 as the dollar remained at elevated levels on prospects of an aggressive rate hike by the US Fed.
Analysts said the profit-taking in the market is on expected lines after a sharp rally last week.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities said volatility would continue due to concerns of a hawkish stance on rate hikes from the central banks amid rising inflation. In an uncertain market, stock and sector-specific buying activity could gain momentum.
Analysts, however, also point out the outperformance of the Indian market because of the signs of healthy economic growth and earnings visibility.
As V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services pointed out: "There are two broad market trends now. One, globally markets have turned weak on renewed inflation concerns and the market consensus is that the Fed's terminal rate would be clearly above 4%. This will weigh on global markets. Two, India's outperformance is strong and consistent. This has fundamental support from a strong economy and good earnings visibility."
The market outlook is positive for the long term but volatility is expected to continue in the near term as the market will react to global cues and macro prints.
Technicals
The Nifty formed a bearish candle on the daily charts, hinting at the weak sentiment.
Chouhan pointed out that the Nifty formed a bearish candle on daily charts and a double top formation on intraday charts indicating the continuation of weakness shortly.
"The trading set-up suggests that a fresh round of selling is possible only after the dismissal of the 17,800 support level. If the index trades above 17,800, it could retest the 18,100- 18,150. On the flip side, below 17,800, a quick intraday correction is not ruled out. Below which, it could slip till 17,700-17,650," said Chouhan.
Palak Kothari, Senior Technical Analyst at Choice Broking pointed out that Nifty has been facing resistance from an upper band of Bollinger which adds weakness for an upcoming session.
"Nifty has given a closing below 21 HMA (hourly moving average) which points out the southward journey in the counter. On the OI (open interest) data, the highest Call OI was witnessed at 18,000 while the highest Put OI was witnessed at 17,600 level. The hourly momentum indicator stochastic is trading with a negative crossover which suggests a correction in the counter," said Kothari.
"The support for Nifty has shifted around 17,700 levels while on the upside 18,100 may act as an immediate hurdle. Breaching below the 17,700 level can see more downside till the 17,500 level," said Kothari.
Key markets data
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.
