On Wednesday, the equity indices NSE Nifty 50 and BSE Sensex closed in the green, albeit flat. Nifty 50 ended the day at 19,347.45, while Sensex concluded the trading session at 65,087.25. The broader markets mostly closed in positive territory, driven by gains in mid and small cap stocks. The Nifty Smallcap 50 and Nifty Midcap 50 posted gains of 1.35% and 0.86%. Nifty Realty, Metal, IT and Auto were the leading gainers among the other sectoral indices, while the laggards included Nifty Financial Services, PSU and Private Banks.
“Positive sentiment initially propelled domestic equities, buoyed by softer US labour market data that caused a retreat in US bond yields, alleviating concerns about rate hikes. This positive outlook was reinforced by Chinese banks’ move to reduce existing mortgage rates, favourably impacting Indian metal stocks. However, gains were tempered as the day progressed, primarily due to weakness in global markets attributed to lacklustre economic data from Europe. Banking stocks bore the brunt of this downturn, while mid- and small-cap segments displayed resilience amid the market dynamics,” said Vinod Nair, Head of Research at Geojit Financial Services.
“Nifty has failed again to reclaim short-term moving average i.e. 20 EMA despite positive global cues and this indicates bears are not in the mood to loosen their grip. We thus reiterate our view to maintain a negative view on the index and stay stock-specific citing the prevailing outperformance of the broader indices,” Ajit Mishra added.
Bank Nifty to trade with a negative bias
“The pullback rally in Bank Nifty has fizzled out at the 44,800 – 44,900 zone where resistance in the form of the 78.6% Fibonacci retracement level (44,780) of the fall from 44,950 – 43,984 was placed. The daily and the hourly momentum indicators provide divergent signals and hence a consolidation is likely. It has decisively closed below the 20- and 40-day moving averages which is a sign of weakness. Overall, we expect the bank Nifty to trade with a negative bias for targets of 43,600 – 43,500,” said Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas.