Nifty’s support shifts to 10583 points

After trading strong during most part on Tuesday, the market plunged as selling emerged at higher levels and erased all the intra-day gains.

The Sensex shed 145.83 points or 0.41 per cent to settle at 35,352, while the Nifty 50 Index fell 36.60 points or 0.34 per cent to close at 10,604.

The broader market outperformed as the Mid-Cap and Small-Cap indices rose 0.51 per cent and 0.33 per cent respectively.

First half was very excellent for the market and there were some early signs of revival seen in the broader market. But quite similar to recent trend, massive sell off seen in the latter half; trapping momentum traders once again on the wrong foot.

The major Sensex losers were NTPC (2.34 per cent), IndusInd Bank (2.3 per cent), Infosys (2.02 per cent), Hero MotoCorp (1.5 per cent) and HDFC (1.24 per cent), while Vedanta (3.38 per cent), Grasim Industries (2.97 per cent), ICICI Bank (1.42 per cent), ONGC (1.39 per cent), Mahindra & Mahindra (1.37 per cent), and Larsen & Toubro (1.25 per cent) were the major Sensex gainers.

Amongst the sectoral indices, realty continued to dominates, gaining 1.7 per cent followed by metal (1.4 per cent). IT stocks fell in the second consecutive session losing over 2 per cent, while power and healthcare too witnessed some selling pressure.

Technical View
Sameet Chavan, chief analyst-technical and derivatives, Angel Broking said, “Clearly market looks extremely depressed and such kind of market is as good as a nightmare for the traders. As far as levels are concerned, recent swing low of 10583 would be seen as a crucial level and any decisive move below this would lead to extended correction towards 10500 and below. On the upside, 10650 - 10720 are the levels to watch out for. One should avoid aggressive longs till the time 10720 is not crossed convincingly. We advise the traders to remain light and avoid taking undue risks.”

Mustafa Nadeem, CEO, Epic Research, said, “The importance of the pattern is that it has formed at very important support which has been playing well for the last two months. Any bounce back from this level shall result in a pullback to 10850 - 10800 while a close below 10600 can take us to much lower levels of 10340. OI data have been pointing to a short term range of 10500 - 10700 on Nifty hence we may see some move towards 10550 - 10560. Though we need to see a closing below these levels to confirm this downside breakout.”

Market view
Jayant Manglik, president, Religare Broking, said, “In the absence of any important domestic triggers, we remain cautious on the market and expect it to be range bound. The investors are likely to keep an eye on movement of crude oil price and rupee (vs $), both of which are unfavourable for the economy currently. On the global front, positive progress on China-US trade talks in Washington may boost sentiments. Given the uncertainty, we advise investors and traders to maintain stock specific approach and avoid risky trades.