Nifty- Domestic market sentiment shifted on Tuesday, with the Sensex and Nifty exhibiting significant volatility throughout the day and the mid and smallcap sectors experiencing a strong wave of selloffs.
The market plummeted as new valuation concerns emerged. Furthermore, while most benefits have already been factored in, the persistent concerns of inflation, increased interest rates, a global economic downturn, and the dollar index and US Treasury yields continue to rise.
Investors were waiting for India’s August inflation and industrial production data, which were slated to be released later today.
Global cues were also poor as investors moved their attention to US inflation data on Wednesday, as well as monetary policy meetings of the European Central Bank on Thursday and the US Federal Reserve on Wednesday next week.
When the Sensex closed, European markets were mixed. The FTSE 100 in the United Kingdom was up approximately 5%, while the CAC 40 in France and the DAX in Germany were down up to 5%.
Stock market today
The Sensex opened 380 points higher at 67,506.88, compared to the previous closing of 67,127.08, and bounced back and forth during the session. During the session, the index moved 591 points, touching intraday highs and lows of 67,539.10 and 66,948.18, respectively.
Nifty, on the other hand, opened at 20,110.15 and reached a new session high of 20,110.35. However, it struggled to maintain altitude and experienced significant instability throughout the session.
The Sensex finished the day at 67,221.13, up 94 points, or 0.14 percent, while the Nifty finished at 19,993.20, down 3 points, or 0.02 percent.
Today, mid- and small-cap stocks took significant losses. The BSE Midcap index dropped 2.96 percent to 32,084.93, while the BSE Smallcap index slid 4.02% to 36,982.74.
The midcap and smallcap indices also set new highs in early trade today, reaching 33,245.85 and 38,769.33, respectively.
The whole market capitalisation of firms listed on the BSE fell to approximately 318.7 lakh crore from 324.3 lakh crore the previous session, leaving investors about 5.6 lakh crore poorer in a single session.
In the Nifty index, 30 equities finished in the red, while the remaining 20 finished in the green.
The top losers in the Nifty index were shares of BPCL (down 3.79%), NTPC (down 3.60%), and Power Grid (down 3.25%).
TCS (up 2.64%), Larsen & Toubro (up 1.88%), and Infosys (up 1.66%), on the other hand, finished as the top gainers in the Nifty pack.
The Nifty Media index fell 4.30 percent, finishing as the sectoral indices’ biggest loser. Nifty Realty down 3.24 percent, Oil & Gas fell 2.82 percent, Metal fell 2.67 percent, PSU Bank fell 2.38 percent, Consumer Durables fell 1.91 percent, and Auto fell 1.86 percent.
The Nifty Bank index dipped 0.13 percent, while the Nifty Private Bank index fell 0.55 percent.
“The level of pessimism in the stock market has risen, prompting a precautionary approach to book profits on the belief that the valuation has exceeded the rationale.” The correction is occurring in midcaps, while large caps remain strong. This cautious trend may prevail in the short term, but the long-term game is on the rise of the domestic economy, surprising upside in corporate earnings, and change in domestic investment patterns,” said Vinod Nair, Head of Research at Geojit Financial Services.
“Markets began to cool off after seven straight sessions of gains, with key indices finishing mixed in a session marked by volatility in early trades but turning range-bound thereafter.” Sluggishness in other Asian and European indicators caused investors to be cautious and take selective profits,” said Shrikant Chouhan, Head of Research (Retail), Kotak Securities.
Technical views on Nifty
After a significant gain in the last seven trading days, Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas, believes the Nifty is poised for consolidation.
“The consolidation range is likely to be 20,100 – 19,800.” Divergent signals from momentum indicators on the daily and hourly timeframes could lead to sideways consolidation. As a result, both price and momentum indicators point to consolidation over the next several trading sessions,” Gedia added.
“Overall, the short-term outlook is positive, and this consolidation will almost certainly be used as a buying opportunity.” In terms of levels, the critical support zone is 19,865 – 19,810, while the immediate obstacle zone is 20,200 – 20,250, according to Gedia.
According to Chouhan, the market’s medium-term texture is still bullish, but we may see rangebound action in the near future.
“For traders, 19,900-19,850 could be key support levels, while 20,100-20,150 could be immediate resistance areas for the bulls,” Chouhan explained.