Dalal Street Corner: Sensex, Nifty50 slip nearly 1% amid volatility – what should investors do on Wednesday

The domestic markets extended decline for the second day in a row on Tuesday, as the BSE Sensex collapsed by over 500 points and Nifty50 settled at a key support level of 16050. Outperforming the benchmarks, the broader markets – Nifty mid and small-cap slipped nearly 0.5 per cent at the close.

Of 50 stocks on the Nifty index, 6 advanced and 44 declined at the market close. Eicher Motors reverses yesterday’s gains to close as the top Nifty loser, down by over 3 per cent, followed by Hindalco down over 2.5 per cent, dragging the metals pack most during Tuesday’s session.

Declining for the second straight session, HCL Tech closes at a 52-week low ahead of its quarterly earnings, and the stock on Tuesday closed nearly 2 per cent lower. While oil marketing companies tumble despite a fall in crude prices – BPCL and HPCL slipped between 2-4 per cent.

NMDC is the top Midcap loser after a cut in iron ore prices, with the stock down over 5 per cent. Similarly, Delta Corp ends off lows as a Group of Ministers meeting on casinos ends inconclusively. While CONCOR ends with a gain of 2 per cent ahead of the Union Cabinet meeting on Wednesday.

On the contrary, NTPC gained the most surging almost 1.5 per cent, followed by Coal India, Shree Cement, Bharti Airtel, Bajaj Finance and Adani Ports soared marginally in an otherwise weak market.

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

Expert: Kunal Shah, Senior Technical Analyst at LKP Securities.

The Bank Nifty index formed an inside bar candle on the daily chart which indicates the market is stuck between the range of 35,000-35,600. The undertone remains bullish as long as the mentioned support of 35,000 is held on a closing basis. The upside resistance if taken out will see a quick move towards the level of 36000 where the highest open interest is built up on the call side.

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

Rate hike fears are back in focus in the global markets ahead of the release of CPI numbers. Inflationary pressures along with strong US jobs data would keep the Fed on the path of aggressive rate hikes. On the domestic inflation front, retail inflation for the month of June is expected to be at 7.03%, maintaining the previous month’s levels. Demand concerns amid the rebound of virus cases in China compelled crude to trade lower.

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

Nifty has slipped below the previous session's low as bears remained at the helm. It has formed a small-bodied candle just below an important moving average, indicating a bearish day of mild significance. On the lower end, however, 16000 is likely to act as crucial support. On the higher end, resistance is visible at 16200, where meaningful call writing has happened.

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

Markets traded under pressure and lost nearly a percent, in continuation to the prevailing consolidation phase. After the weak start, the benchmark drifted further lower and settled around the day’s low.

Markets would react to the inflation data of India and the US in early trades. Besides, the earnings announcement from some of the IT majors would also be in focus. We recommend maintaining a focus on identifying stock-specific opportunities with a bias on the positive side.