Frontline indices the Sensex and the Nifty snapped their four-day winning run on November 2 as caution crept in ahead of the US Federal Reserve monetary policy decision later today.
Investors booked profit ahead of the US FOMC meet outcome due to fears that strong US employment figures might give the Fed confidence to continue with aggressive rate hikes in the coming months too. A 75 bps rate hike by the Fed is factored in the market, say analysts.
Sensex opened at 61,156.89 against the previous close of 61,121.35 and touched intraday highs and lows of 61,209.65 and 60,794.39 respectively.
The 30-share index closed 215 points, or 0.35%, lower at 60,906.09. The Nifty50 closed with a loss of 63 points, or 0.34%, at 18,082.85. BSE Midcap index also ended lower by 0.12%, but the Smallcap index rose 0.23%.
“Investors globally remained optimistic ahead of the Fed's policy decision at 1800 GMT, with many hoping for signs of a slowdown in future rate hikes. The Bank of England is expected to state its monetary policy decision on Thursday,” reported Reuters.
Shares of Sun Pharma, ITC and Tech Mahindra ended as the top gainers while those of Bharti Airtel, Maruti and Hindustan Unilever ended as the top laggards in the Sensex index.
“After having rallied sharply over the past week or so, markets finally took a breather ahead of the Fed's decision on policy rate hike. Traders preferred to book some profit in selective counters to avoid being caught off guard by worries of a sharp correction worldwide in case the rate hike is above expectation and the Fed maintains a hawkish stance,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
Telecom, realty and technology indices ended lower by a percent each. Infosys, Bharti Airtel, TCS and HCL Tech were among the top drags on the technology index. Godrej Properties, DLF and Phoenix Mills were among the top drags on the realty pack.
Crude oil prices advanced after industry data showed a drop in the US crude stocks. Brent Crude traded near the $95 per barrel mark. The rupee fell 8 paise to settle at 82.79 per dollar.
Technical view by expert
Om Mehra, Technical Associate of Choice Broking pointed out that the daily chart of Nifty exhibits a bearish candle. From a short- to medium-term view, the index may experience some profit booking till the resistance zone 18,180-18,200 is crossed on a closing basis.
“17,850-19,000 will serve as a short-term support range on the downside. Volatility is now low ahead of critical key events, but it may rise in the coming weeks. Indicators such as MACD and RSI are slightly skewed on the negative side. Put call ratio stands at 0.96 level,” said Mehra.
“According to the volume profile, 17,900 may act as strong support. Short-term traders may find themselves in a situation where they need to hold a hedged position to protect themselves in the event of a panic,” Mehra said.
Key market data
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.
