Benchmark Indices Nifty 50 and Sensex ended Friday’s trading session in the red. The markets did see slight recovery towards the last hour of trade after opening lower on weak global cues and ended with marginal losses. The Nifty 50 ended down 55.10 points or 0.28% to settle at 19, 310.15 and the BSE Sensex closed the session down 202.36 points to close at 64,948.66. For the week Nifty ended 0.60% lower while Sensex shut shop down 0.57%.
Some of the top losers in Friday session included select auto, metal and tech stocks including Hero MotoCorp, Tech Mahindra, TCS, Hindalco Industries and Infosys. In fact, the IT and pharma index saw significant losses.
S Ranganathan, Head of Research at LKP Securities, said, “Benchmark Indices ended in the red today on the back of profit taking seen in IT stocks as well as PSU stocks. The 6% deficiency in the Monsoon was an important factor with several states witnessing deficits across districts. The Evergrande Bankruptcy in China though was brushed away since real estate loans in India are by and large regulated well in India now.”
Where are NSE Nifty 50, Bank Nifty headed?
The question then is where is the Nifty 50 headed after closing decisively below the 40-day moving average (19,358)? Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas says this surely is a “sign of weakness. Because of the fall in the last couple of trading sessions, the Nifty has also closed in the negative for the fourth consecutive week and the weekly momentum indicator has also triggered a negative crossover which indicates that weakness is setting in on a higher time frame. The lower top lower-bottom formation is still intact and hence the downtrend is intact. On the downside we expect the Nifty to target levels of 19, 100.”
Bank Nifty to slip towards 43500
The Bank Nifty has continued with its losing streak and closed in the negative for the seventh consecutive trading session. “It has reached the 20-week moving average (43,800) and hence the fall may not be severe from current levels. The trend is still negative however, oversold and we can observe divergence on the hourly charts however it needs to be confirmed by the price. Until the Bank Nifty trades below 44,000, we can expect the weakness to continue. On the downside, it can slip towards 43,500,” Gedia added.