Market moves into consolidation mode

Indian equity market benchmark index dipped lower as the market closed for the weekend with the Nifty-50 down by 22.80 points, or 0.21 per cent, settle at 11, 035.40. Global developments led to weaker sentiments in the market as the European Central Bank's commentary indicated dovish monetary policy stance on slackening economic growth  in the European Union region.

The National Stock Exchange’s Nifty-50 opened lower at 11,038.85 as against previous close at close at 11,058 and touched a low of 11,008.95 and high of 11,049. The Sensex closed at 36,671.33 down53.99 points or 0.15 per cent.

The foreign institutional investors remained net buyers of equities worth Rs 1,095.06 crore. The domestic institutions were net seller by Rs 470.70 crore.

The broader markets were mixed as the Nifty Mid-Cap was down 0.52 per cent. The BSE Mid-Cap lost 0.08 per cent and the BSE Small-Cap was also down by 0.08 per cent.

On the sectoral front, export-oriented information technology and metal indices were losers as Indian rupee became stronger against the foreign currencies. Rupee had closed at Rs 69.99 per US dollar on Thursday. BSE IT closed 0.88 per cent lower while BSE metal lost 1.57 per cent. BSE consumer durable gained 0.54 per cent while BSE power gained 0.96 per cent.

The advance decline ratio was in favour of losers for second consecutive session indicating growing bearish sentiments in the market, on BSE 1,460 scrip closed with decline and 1189 scrip's gained while 139 closed unchanged.

Technical View
Nagaraj Shetti, Technical Analyst, HDFC securities said, "The Nifty shifted into a consolidation mode, could drag downward correction in the next week. Nifty shifted into a consolidation type movement for the second session and closed the day on a negative note. The Nifty is placed at the edge of key overhead weekly resistance. Though, the Nifty moved up firmly during the week, the presence of key overhead resistance at 11,050-11,100 levels is expected to weigh high and could drag the Nifty for downward correction in the next week

Market View

Teena Virmani, Vice President - Research, Kotak Securities, said, "The markets have continued to remain volatile led by mixed global cues as well as border tensions across India and Pakistan. After the IAF strikes across the LoC, the advantage is now with the ruling party as against opposition."

"We feel the froth and over valuation in the Mid-Cap space has come off sharply due to the underperformance vis-à-vis the Nifty.

“We feel there is very high probability of Mid & Small Caps outperforming the Large-Caps in CY19. For this thing to fully materialize in CY19, we need earnings recovery and a clear mandate or a single party led coalition Government at the Centre. Scope of valuation re-rating remains very high in host of Mid & Small-Caps provided earnings come in line with estimates," Virmani said.