Markets may witness short term weakness
For the fourth consecutive session, the markets closed with gains despite persistent volatility during the intra-day trade on Wednesday. Buying by both FPIs (Rs. 686.33 crore) and DIIs (Rs. 1576.73 crore) are likely to boost market sentiments.
The Sensex closed at 38,598.99 up 92.10 points or 0.24 per cent while the broader Nifty-50 index closed at 11,471.55 up 43.25 points or 0.38 per cent. While the BSE Mid Cap index fell 0.14 per cent, the BSE SmallCap Index was up 0.21 per cent.
Among the sectoral indices, the gainers included BSE Oil& Gas (1.20 per cent), Realty (1.09 per cent), IT (0.69 per cent), Telecom (0.64 per cent) and Healthcare (0.44 per cent). The laggards included BSE Power (-1.06 per cent), Metal (-0.42 per cent), Auto(-0.23 per cent), Capital Goods(-0.27 per cent) and FMCG(-0.09 per cent). Power sector stocks fell as power generation saw its worst fall in last five years.
Technical View
Shrikant Chouhan, senior vice-president, Technical Research, Kotak Securities said, “Although the market displayed nominal gains, it remained extremely volatile in a narrow range of 70 points for the Nifty-50 index. Nifty managed to add 35 points over the previous close and Sensex added 93 points. Sensex closed higher mainly due to exceptional strength in HDFC and Bajaj Finance. For Nifty, major contributors were Bajaj Finance, TCS and BPCL.”
“Technically, the market has formed a “Hanging Man formation” at the top of the current up move. It would result in short term weakness, If Nifty fails to break above 11,490 and breaks below 11,410 which is lowest level for the day. On the dismissal of highest point of the said formation at 11,490, Nifty would rally to 11,550/11,600. Thursday, it could be one more volatile day for the market,” Chouhan said.
S. Ranganathan, head of Research, LKP Securities said, “Wednesday’s trade witnessed an improvement in the broader market led by the insurance sector and select Mid Caps.”
Market View Sharekhan by BNP Paribas’ Gaurav Dua, said, “Markets continued with the upward momentum for the fourth consecutive day. The benchmark indices ended in green despite weakness in CNX Bank Nifty and the entire consumer pack.”
“The privatisation push by the government has infused new life into PSU stocks especially the state-owned oil & gas companies. The IT services sector is also showing strength and supporting the markets. The momentum could sustain amid the festive season,” Dua said.
Religare Broking’s Ajit Mishra said, “In a volatile trading session, the markets swung both ways before ending the session with decent gains. The broader markets under performed with both BSE Mid Cap and Small Cap indices closing on a flat note. The sectoral indices exhibited mixed trend. While Oil & Gas, Realty and IT ended with gains, other sectors like Metal, Auto and Capital Goods ended with losses.”