Closing Bell: IT, PSU Bank force market to extend weakness to 4th session; Nifty below 16,000, Sensex sheds nearly 100 points

Extending weakness for the fourth session, the Indian market ended with marginal cuts amid easing of wholesale price inflation to 15.18% in June 2022 against 15.88% in May. The WPI data dropped in June amid lower prices of manufactured and fuel items, even though food articles remained costly. 

After trading in the narrow range throughout the day, the benchmark indices ended lower amid profit booming in small cap stocks. Besides, the weakness also came from IT and PSU Bank stocks. 

The broader Nifty50 and Sensex declined 0.18% each as the former slipped below 16,000-mark, while the latter witnessed around 100 points cut.  

The Nifty corrected towards the lower band of the rising channel before closing a bit off the day's low, said Rupak De, Senior Technical Analyst at LKP Securities. "On the daily chart, the index has remained below the important moving average. The daily RSI is in a bearish crossover. On the lower end, the index may find support at 15850-15875. On the higher end resistance is visible at 16100," the expert added.

Tracking weak cues in global markets, Indian indices gave away their initial gains amid concerns over higher-than-expected US inflation data, said Vinod Nair, Head of Research at Geojit Financial Services. "Investors are increasingly expecting the Fed to carry out a minimum 75bps rate hike this month in order to combat high inflation. On the domestic front, India’s WPI inflation moderated in June although it remains at the elevated levels, but is expected to ease further during the year," he added.

In the broader market, Nifty Midcap ended flat with positive bias, while Smallcap index dropped over one per cent as India Volatility Index settled above 18-mark with around one per cent change.  

Sectorally, Nifty PSU Bank declined the most with over two per cent cut, while Nifty IT followed it with around one and half per cent decline on Thursday, while Nifty Oil & Gas, Pharma and Healthcare were top gainers.  

peaking on Bank Nifty, Kunal Shah, Senior Technical Analyst at LKP Securities,  said the Bank Nifty index continued to face selling pressure from higher levels and faced stiff resistance at the 35,200-35,300 zone. "The lower-end support stands at 34,400 and if breached will lead to further selling pressure towards 34000. The index is broadly stuck in a range between 34,400-35,300 zones and a break on either side will lead to trending moves,"  he said.  

Sun Pharma, Dr Reddy's, ONGC, Maruti Kotak Bank, Titan, RIL and Nestle India gained in an otherwise flattish trade. Axis Bank, State Bak of India, Hero MotoCorp, UPL, Wipro, Tech Mahindra, HCL Tech and TCS dragged the benchmarks the most on Thursday.