Dalal Street Corner: Markets snap 2-day winning streak, close negative; what should investors do on Wednesday

The Indian markets snapped a two-day gaining streak to end negatively on Tuesday as profit booking weighed on the stock markets. The banking and financial sectors turned out to be major drags. The BSE Sensex declined 435 points to 60,176 and Nifty 96 points to 17,957 at the market closing time.

Except for Punjab National Bank (PNB), all Nifty Bank constituents ended in the red. HDFC Bank, Kotak Bank, ICICI & SBI were primary reasons for the Tuesday market slump. 

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Of the 50 scrips on Nifty50, 11 advanced, 38 declined while one remained unchanged. HDFC Bank, Bajaj Finserv, HDFC, Kotak Bank, IndusInd, Bajaj Finance were the top Nifty losers, while Adani Ports, NTPC, Power Grid, Tata Motors, ONGC, Tata Consumer were the top Nifty gainers on Tuesday. 

Midcaps' outperformance kept market breadth in favour of advances as the Nifty Midcap index jumped 422 points to settled at 31,047-mark. 

Sectorally, power company shares made a sharp upward move in the last hour of trade with Tata Power closing 9 per cent higher from the Monday closing price. Other stocks which were among top gainers included Polycab and Havells. 

Air conditioning stocks also surged on price hike reports. Voltas and Blue Star gained were among top gainers from this theme and were up over 2 per cent each. Similarly, Diagnostic stocks rose with Metropolis Healthcare moving 7 per cent higher.

The other beneficiary wa cement sectors where stocks moved higher on reports of price hike, JK Cement up 5 per cent. 

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

Expert: Ajit Mishra, VP - Research, Religare Broking Ltd 

After the flat start, the benchmark hovered in a range and ended around the day’s low. Amid all, sectoral indices traded mixed wherein profit booking in banking & financials dragged the indices lower. However, buying in power, consumer durables, and FMCG packs capped the downside.  

Markets may consolidate after the recent surge, and it would be healthy. However, there’ll be no shortage of trading opportunities, thanks to scheduled events like MPC’s monetary policy review meet and the beginning of the earnings season. 

Participants should focus on the sectors/themes which are playing out well and utilize the pause to accumulate quality stocks on dips. 

Expert: Rupak De, Senior Technical Analyst at LKP Securities 

Nifty remained sideward during the session. On the higher end, it found resistance around the previous high before ending the session in the red. However, the Nifty has managed to close above 200DEMA indicating a prevailing positive trend. On the higher end, 18150 may continue to remain an immediate resistance, on the lower end, support is visible at 17800.