Dalal Street Corner: Market continues declining trend; Sensex, Nifty50 down around 1% - What should investors do on Friday

The Indian markets continue to decline after Tuesday’s pause, it staged a smart recovery from intraday lows, led by banking stocks. Both the benchmark indices Sensex and Nifty50 closed in the red, but up 838 and 243 points from lows, respectively, during Thursday’s session. 

Nifty Bank, one of the key contributors to Nifty50, gained nearly 1,000 points or up 3 per cent from lows to close almost 1 per cent higher to 37,982-level, led by SBI and Axis Bank.  

See Zee Business Live TV Streaming Below:

The broader markets slumped too along with frontline indices down over 1 per cent. The market breadth improves from opening levels, but is still in favour of declines. 

Axis Bank, SBI, Maruti, Cipla, Kotak Bank, IOC and Bajaj Auto became the top Nifty gainers, while in the broader markets, Torrent Pharma ended up becoming the top midcap loser after weak Q3 earnings, moreover, even brokerages cut estimates on the stock. 

Joining Torrent, Indiamart, Coforge, Dalmia Bharat, Mindtree, are the top midcap losers, while SRF dipped by 5 per cent despite reporting better than expectations Q3 earnings. Similarly, IT & Pharma stocks witnessed profit-taking, Textile stocks were sought after in the broader market amid results.  

We have collated views from different experts as to what investors should do when trading resumes: 

Expert: Rupak De, Senior Technical Analyst at LKP Securities 

The volatility has been predominant during the day as the benchmark Nifty traded in the range of 300 points. On the lower end, Nifty held the recent low of 16836 which is made in early trades of Tuesday. So, Nifty has respected the support of 16825.  

Going forward the market may remain volatile. On the lower end support is visible at 16825-16800. A decisive fall below 16800 may trigger a resumption of the corrective phase. However, if Nifty may remain in the recovery mode as long as 16800 is held. 

Expert: S Ranganathan, Head of Research at LKP securities. 

As the US Fed left key interest rates near zero, its hawkish commentary quickly washed away gains in Global Markets leading to a gap down opening in Indices back home.  

As FPI continued to book profits from Indian Equities, value stocks made a comeback with the PSU Bank Index rallying over 5 per cent in afternoon trade today well supported by Auto stocks to stage a smart recovery.  

Expert: Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services Limited 

Nifty index opened negative and then slowly drifted towards 16866 levels in the first half of the session. It managed to hold previous day’s low and recovered well by more than 250 points in the second half of the day.  

It formed a small bodied Bullish candle like a Harami and an Inside Bar on daily scale with longer lower shadow indicating buying is seen at declines. It negated its lower lows formation of the last six sessions but continues forming lower highs. Now it must hold above 17180 zones, to negate its lower highs formation and to start the next leg of bounce towards 17350 and 17500 zones whereas support exists at 17000 and 16850 zones. 

Expert: Sachin Gupta AVP, Research Choice Broking 

Technically, the nifty index has taken immediate support at Rising Trendline and 78.2 per cent Retracement Levels of its prior rally on the daily chart. A momentum indicator Stochastic is also trading near oversold territory suggests further reversal in the near term.  

At present, the Index has support at 17000/16900 levels while resistance comes at 17350 levels. On the other hand, Bank nifty has support at 37600 levels while resistance at 38500 levels.