Dalal Street Corner: Markets snap 5-day gaining streak, close 1% lower; what should investors do on Wednesday?

Indian markets snapped five-day gains on Tuesday as both Sensex and Nifty50 slipped by over 1 per cent each. The benchmark indices were dragged mainly by metals and IT stocks.

Investor sentiments got a hit amid negative global market cues and the news of rising covid cases and lockdowns in major Chinese cities has sent negative signals to the market, the market analyst Mohit Nigam said in his comment. 

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As many as 14 stocks advanced and 36 declined on Nifty50. Tata Steel, Hindalco, ONGC, Coal India, JSW Steel were the top losers on the 50-share index. The decline was 3-5 per cent. Meanwhile, Tata Consumer, Mahindra and Mahindra, Cipla, Shree Cement and Maruti were top gainers, up 1-4 per cent.

Mid and small cap shares fell between 1-1.5 per and Nifty Bank down nearly 1 per cent.

Metals were down over 4 per cent during Tuesday’s trading session as global commodity prices of metal softens, followed by IT index, which also fell over 2.5 per cent. Nifty Auto and FMCG were only gainers on NSE, each up by around 0.6 and 0.2 per cent. 

The Auto index gained as the government announced the beneficiaries of the auto PLI scheme. Some prominent names that bagged the approval are Maruti, Bharat Forge, Bosch, Lumax among others.  

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

Expert: Vijay Dhanotiya, Lead of Technical Research at CapitalVia Global Research Limited. 

The market witnessed profit booking and failed to sustain above the level of 16800. Level of 16600 is an important support level. If the market is unable to sustain above this level, we expect the correction to continue till the level of 16400. 

The momentum indicators like RSI and MACD indicate positive momentum in the market. The research suggests that the correction could continue in the first half tomorrow and then we can expect a bounce from the level of 16400. 

Expert: Vinod Nair, Head of Research at Geojit Financial Services 

The world equity market lost its momentum as new financial and trade sanctions were imposed on Russia along with the suspension of gas imports. It is a setback for the market sentiment, which was improving in anticipation of a truce in war.  

The Indian market was outperforming due to high commodity prices. World markets are also lower ahead of the US Fed meeting in which the market widely expects FOMC to initiate a rate hike. 

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

Nifty failed to hold above 16900 zones and slipped to 16555 marks in the second half of the session. It formed a Bearish Engulfing pattern on daily scale and negated its higher lows of the last four sessions. Now it has to hold above 16666 zones, for an up move towards 16800 and 17000 zones whereas support exists at 16500 and 16350 zones. 

Expert: Rupak De, Senior Technical Analyst at LKP Securities. 

Nifty formed a dark cloud cover on the daily chart as it found resistance around 200DMA on the daily chart. On the lower end, it found support at the upper band of the falling channel. Going forward, the index may remain in the green as long as 16640 is held decisively. On the higher end, resistance is visible at 16900-17000" 

Expert: Mohit Nigam, Head - PMS, Hem Securities 

US Fed FMOC has a two-day meet from today, the general market sentiments expect a 25 basis points hike in interest rates to curb the situation of rising inflation. Investors also took a note of premature news that India is considering to buy Russian crude oil at discounted prices by facilitating Rupee-Ruble trade 

On the technical front key resistance levels for Nifty50 is 17,000 and on the downside 16,600 will act as strong support. For Bank Nifty key resistance level is 35,700 and on the downside 34,000 will act as strong support. 

Expert: Parth Nyati, Founder, Tradingo on today's market. 

Indian equity markets have been positive due to a sharp fall in crude oil prices and a pause in selling by FIIs. However, Nifty and Bank Nifty were trading near their important resistance levels after a smart pullback.  

Nifty had an immediate resistance around its 200-DMA which is currently placed at 16980 level while bank nifty was trading near its 20-DMA, hence selling pressure at higher levels. A strong demand zone at 16500-16400 for Nifyt; 34300-34000 critical support zone for the bank nifty on downside.  

Expert: Sandeep Jain – TradeSwift – Director 

The major focus of Indian markets’ participants will be on two-day FOMC meet which begins from today. The volatility, which is already high in the market, shall persist amid ongoing situations such as Russia-Ukraine, and fresh lockdowns in China due to new covid wave among other. 

Investors are suggested to remain cautious with the news flow increasing, which creates more uncertainty in the market. His advice to investors is to continue accumulating stocks with strong fundamental in staggered manner from both large cap and broader markets, as many of them trading at high discount.