Dalal Street Traders Corner: Nifty closes below 18K; What should investors do on Wednesday?

Indian market closed in the green despite muted global cues on Tuesday supported by a rally in PSU banks on privatisation hopes, consumer and metal stocks.

Profit booking in the second half of the trading session pushed the Nifty50 below the 18,000-mark, while the S&P BSE Sensex rose nearly 150 points.

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Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 148 points to 60,248, while the Nifty50 was up 46 points to 17,991.

Sectorally, buying was seen in PSU Banks, Media, Energy, and FMCG stocks, while selling pressure was visible in IT stocks.

"Following selling in IT stocks as a result of a weak start to the earnings season and weakness in global markets, the domestic market traded in the negative zone,” Vinod Nair, Head of Research at Geojit Financial Services, said.

“However, with strong support from PSU Banks on revamped hopes of privatisation and continued buying interest in consumer goods, metals, and auto, indices managed to end on a positive note. While global markets traded with cuts in fears of rising inflation due to soaring commodity prices and energy crunch,” he added.

India VIX was down by 1.45% from 16.08 to 15.84 levels. Lower volatility has again given buying support to the broader market at higher zones. Now VIX needs to cool down below 15-14 zones to continue the smooth ride.

Bank Nifty managed to hold immediate support of 38100 zones and then surpassed its previous day’s high to hit yet another lifetime high of 38609 levels. Rally in banks was led by SBI, IDFC First Bank, Federal Bank, and PNB.

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

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

The Nifty50 formed a Bullish candle on the daily frame with a long lower shadow indicating buying is visible at every small decline.

Now, the index must hold above 17950 for an up move towards 18100 and 18200 levels whereas on the downside support is seen at 17850 and 17777 zones.

Expert: Ashis Biswas, Head of Technical Research at CapitalVia Global Research Limited

If the Nifty50 can sustain the level of 18000, we can witness higher levels of 18250. The momentum indicators like RSI and MACD indicating positive momentum is likely to continue.

Expert: S Ranganathan, Head of Research at LKP Securities

The day witnessed hectic activity in the PSU banking space with stocks from 2-wheelers and consumer durables seeing good demand in line with the festive mood.

While we did see a continuation of profit booking in IT names, the Small & Midcap space was buzzing with accumulation across sectors. A late surge in the Metal Index led by Aluminium stocks lent support to the rally.

Expert: Mohit Nigam, Head - PMS, Hem Securities

Going ahead, bull momentum doesn’t look like fizzling out however one needs to stay cautious following global trends. Sectors that could remain in traction are Banks, Energy, Metals, Infrastructure, and Consumer Discretionary.

Technically, the Nifty50 looks like holding on to 18,100 as near-term resistance, while 17,700 could act as a key support level.

Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.