Market consolidation likely near-term

The benchmark Sensex snapped its longest winning streak since March as some investors gauged the index has gained too much, too quickly after it closed at a record high on Monday.

The Sensex fell 53.73 points, or 0.13 per cent, to 40,248.23 after swinging between gains and losses at least four times following a seven-day winning streak. The Nifty 50 slipped 24.10 points, or l 0.2 per cent, to close at 11,917.20.

On the Sensex chart, top losers included IndusInd Bank, Sun Pharma, Infosys, Tata Steel and M&M, shedding up to 2.40 per cent.

Globally, bourses in Shanghai, Hong Kong, Tokyo and Seoul settled higher on optimism over the US-China trade deal.

The Sensex’s 14-day Relative Strength Index rose to 71, above the level of 70 that some investors read as a signal to sell.

The earnings season is turning out to be good, with 20 out of 31 Nifty firms reporting quarterly earnings that have either beaten or matched the average analyst estimates.

Technical View “The ongoing corporateearnings season and global developments are likely to dictate the market trend in the coming sessions,” said Ajit Mishra, Vice President of Research at Religare Broking Ltd. “After a decent run-up over the last few sessions, some consolidation cannot be ruled out in the nearterm,” he said.

Analysts see an important support level for the Nifty at 11,859.73 points, after which 11,802.27 could be another support zone. Key resistance levels seen are 11,976.83 and 12,036.47 points.

Market View Shrikant Chouhan, Senior Vice-President, Equity Technical Research, Kotak Securities, said: “The market has taken a breather and this happens whenever we see profit-taking in auto stocks. In fact it's most sensitive sector for any economy and now a days along with market experts even retailers are tracking it closely.”

He said that excitement is missing in the market as majority of the index participants have already declared their Q2 numbers and now traders will wait for either domestic developments or global development on the trade tariff front.