Dalal Street Corner: Markets end negatively amid continued FII selling; what should investors do on Tuesday

On the first day of the week, the Indian markets ended the session negatively, dragged by the financial and FMCG stocks. The BSE Sensex closed over 500 points lower and the Nifty50 fell below the 17400-mark. 

Succumbing to selling pressure, even the broader markets following the benchmark suite closed with minor cuts as both the mid and small-cap indices declined by a quarter per cent. 

Of 50 scrips on the Nifty50, 15 advanced, and 35 declined at the market close. In which, Bajaj twins and Reliance Industries slumped most between 2-3 per cent, while Axis Bank and Tech Mahindra each closed over 2 per cent higher, followed by SBI Life, Wipro, and Hindalco each up over 1 per cent. 

In the mid-cap category, Strides, Birlasoft, Delta, Piramal, Syngene turned out to be top gainers at the market close on Monday. And, on the merger announcement, Shriram Trans declined 2 per cent and Shriram City rises 6 per cent to be in the top midcap gainers list at the close. 

In the IPO segment, MapMyIndia's initial public offer witness a massive subscription as the issue was booked over 121 times on the final day of the offer, while MedPlus Health IPO received 21 per cent of the subscription on the first day and Tega Industries IPO saw a bumper listing of around 66 per cent. 

"Ahead of domestic inflation data release and key global central bank meetings, the benchmark indices dived into the negative zone digesting weak macroeconomic numbers and continued FII selling,” Vinod Nair, Head of Research at Geojit Financial Services said in a post-market comment. 

He added, “India’s Index of Industrial Production grew by 3.2 per cent in October which was lower than market expectations. US CPI inflation was reported above the expected lines at 6.8 per cent year-on-year in November owing to rising prices for food, energy and shelter.” 

According to Nair, the policy outcome of key central bank meetings especially the US Fed and ECB, will be keenly monitored by the markets to determine its trends amid rising global inflation. 

“We witnessed a sharp reversal and the Nifty dropped! The resistance of 17500 is crucial for the markets and we have to close above it in order to scale higher. On the flip side if 17300 breaks we might see a deeper correction which could take the index lower to 17000,” Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments said in a post-market note. 

Similarly, Vijay Dhanotiya, Lead of Technical Research at CapitalVia Global Research Limited said, “The research suggests that 17400 will be an important support level in the market. If the market is able to sustain above the market levels of 17400, it can witness a positive momentum in the market which can lead to the higher levels near 17800.” 

“Technical indicators suggest a volatile movement in the market. As Such we take a cautious stance and advise the traders to refrain from building a fresh buying position until we see further improvement in the market conditions”, he added in his post-market comment on Monday.