Weak global cues amid anticipation of sharp rate hikes by the US Fed continued weighing on the market sentiment back home as key indices the Sensex and the Nifty ended in the red for the second consecutive session.
European stock markets opened in the red on Wednesday after US economic data prompted traders to ramp up Federal Reserve rate hikes bets, pushing the dollar to a 24-year high against the Japanese yen, reported news agency Reuters.
Sensex opened at 58,789.26 against the previous close of 59,196.99 and touched the intraday low of 58,722.89. The index finally closed 168 points, or 0.28%, lower at 59,028.91 while the Nifty ended with a loss of 31 points, or 0.18%, at 17,624.40. Mid and smallcaps continued outperforming as the BSE Midcap and Smallcap indices rose 0.46% and 0.73% respectively.
"The latest economic figures indicate that the US central bank would continue to raise interest rates. As, according to ISM's (Institute of Supply Management) US Non-Manufacturing PMI, the services sector expanded last month at a rate which was higher than anticipated, putting pressure on global markets. Main indices followed the global trend however, mid and smallcaps rallied with strong outperformance," said Vinod Nair, Head of Research at Geojit Financial Services.
Shares of IndusInd Bank, Bharti Airtel, Mahindra and Mahindra, Maruti and State Bank of India ended as the top laggards in the Sensex index. On the other hand, UltraTech Cement, Wipro, Sun Pharma, Bajaj Finance and TCS witnessed buying interest as they ended as the top gainers in the Sensex kitty of stocks.
BSE Auto, Power and Utilities indices fell by a percent. Bank and financial indices also ended in the red.
Despite the weak market sentiment, as many as 181 stocks, including Coal India, Grindwell Norton, Adani Enterprises, Ambuja Cements, Blue Dart Express and Hindustan Aeronautics, hit their 52-week highs on BSE.
Crude oil prices saw an uptick but the benchmark Brent Crude remained below the $95 a barrel mark. The rupee fell almost seven paise to close at 79.90 per dollar.
Rupak De, Senior Technical Analyst at LKP Securities pointed out that bulls have been able to protect 17,500 on a sustained basis, which attracted buyers at the lower levels. The trend remains positive for the near term.
On the lower end, support is visible at 17,470, below which, the Nifty may drift down towards 17,200. Resistance is visible at 17,750, said De.
"We are of the view that on the lower side 17,500 would be the key support level while 17,700 could act as a major hurdle for the bulls. Post a 17,700 breakout, the index could move up to 17,800-17,850. On the flip side, the dismissal of 17,500 could increase the selling pressure. Below 17,500, we could expect short-term weakness till 17,400-17,300,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
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