Nifty likely to extend upward move

Volatility is back in the market on Thursday, Sensex oscillated 340 points intra-day before an almost flat close.

Bulls were seen losing ground to bears as Sensex touched a low of 39,461.27 losing almost 300 points but recovered to close just 15.45 or 0.04 per cent lower at 39,741.36 points.

The Nifty-50 closed with a gain of 7.85 points or 0.07 per cent at 11,914.05.

The broader market closed in the red with BSE Mid-Cap down 0.33 per cent while Small-Cap fell 0.50 per cent.

However, large scale volatility is ruled out as volatility indicator India VIX closed at 13.66 down 3.27 per cent as against it recent high of 30.18 touched on May 22, 2019. The advance-decline ratio worsened further with 1,625 stocks losing and only 920 stocks advancing.

Among the sectoral indices BSE IT was the top loser at 0.78 per cent, other sectoral losers included Auto (-0.44 per cent), Technology (-0.57 per cent), Oil & Gas (-0.19 per cent) and Metal (-0.21 per cent).

Among the top losers in Sensex were Yes Bank (-12.96 per cent), IndusInd Bank (-4.96 per cent), Infosys (-1.49 per cent), Maruti (-1.03 per cent), Vedanta (1.03 per cent) and Tata Motors (0.95 per cent). Foreign portfolio were net buyers of equities worth Rs 172.35  crore while the domestic institutions were net sellers by Rs 444.87 crore.

Technical View

Sneha Seth, Derivatives analyst, Angel Broking said, "For the major part of the day, we had a rub off effect of last couple of day's selling and in this process, went on to almost test the 11,800 mark. But once again the 20 DMA acted as a sheet anchor which eventually resulted into a v-shaped recovery to reclaim 11,900 on a closing basis. At this point in time, 11,800-11,850 remains an immediate base for the Nifty; whereas, resistance is placed around the psychological mark of 12,000. However, considering the recovery seen in Thursday's session, we soon expect the Nifty extending its upmove beyond 12,000 in the coming week."

Market View

Umesh Mehta, Head of Research, Samco Securities said, " The markets rolled southwards but there was some recovery by the end of the day. It was not only banks and NBFCs that faced the intraday carnage but other pockets too showed signs of weakness. The broader indices especially the Mid-Caps witnessed selling pressure today. IndusInd Bank and Yes Bank fell by over 8 per cent and 13 per cent intraday respectively due to the downgrade by UBS on concerns of rising NPLs and credit costs and the exposure of these banks to non-investment grade companies."