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Business News/ Market / Stock-market-news/  Nifty closes below 200 DMA; seen drifting further
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Nifty closes below 200 DMA; seen drifting further

The 50-share Nifty fell 0.55% to 8,239.75, below its 200 DMA of 8,267.27

Photo: Abhijit Bhatlekar/MintPremium
Photo: Abhijit Bhatlekar/Mint

Mumbai: The National Stock Exchange’s (NSE’s) benchmark equity index Nifty on Monday shed 0.6% and closed below its crucial 200-day moving average (DMA), indicating more pain to come as earnings upsets and fears of a sub-par monsoon continue to cast their shadow.

The 50-share Nifty fell 0.55%, or 45.85 points, to 8,239.75, below its 200 DMA of 8,267.27, while the 30-share Sensex closed 0.62%, or 170.45 points, lower at 27,225.93. The Nifty and the Sensex have shed nearly 3% and 2.62%, respectively, in April.

“The 200 DMA is simply the prices of stocks for the last one year," said Vijay L. Bhambwani, technical analyst and chief executive of bsplindia.com.

“This implies the long-term investors are now seeing their prices below one-year average, and are seeing an MTM (market to market) loss. A further investment from them will not come in unless the prices move up again," Bhambwani said, adding prices could slip from here on.

On the fundamental end, there are no positive triggers in sight.

“There is nothing much to look forward to immediately. There is a talk the rate cut is also far away. That could be the first major trigger for markets," said market analyst Ambareesh Baliga.

According to Baliga, the minimum alternate tax has already done its damage—despite some clarifications—and earnings and monsoon forecast have also disappointed.

“There will be a lot of question marks on Modi’s performance from everyone—individuals, firms and across. He launches programmes, but there is no one to lead them. Replicating the state model at the national level has not yet happened. It will take time," said Baliga.

A Mint analysis over the weekend showed that the aggregate net profit of 101 firms that have announced their March-quarter earnings fell 9.23%, their worst performance since at least the quarter ended December 2012.

Net sales dropped 14.12% in the three months to March from a year ago, again their worst show in 10 quarters, the analysis showed.

While the market looks subdued, it may be premature to expect a steep fall.

“I would look at 200-day exponential moving average, which is Nifty at 8,186. Nifty has not breached below that. When we talk about a breach, it should sustain below that for four to five sessions, only then we can conclude that it is a decisive breach," said Sachidanand Uttekar, equity technical analyst at Motilal Oswal Securities Ltd.

“The kind of activity (buying) we saw yesterday (Tuesday) and right now, I see Nifty April series expiry above 8,300 level and—not below that," added Uttekar.

Two days ahead of the April derivatives series expiry, market-wide rollovers moved to 44%, a tad lower than average rollovers of around 45% for the last three series, a report from Edelweiss Financial Services Ltd said on Tuesday. “Long side aggression is lacking in the market, resulting in lesser rollovers and low roll cost. This indicates cautious stance for the next month," Yogesh Radke, technical analyst with Edelweiss Financial Services, said in a phone interview on Wednesday.

In Wednesday’s trade, only eight of 30 Sensex stocks managed to close in the green. However, the market breadth was positive for the broader market, with gainers beating losers in the ratio of 1.3:1 on BSE Ltd.

BSE mid-cap and BSE small-cap indices staged a comeback with a 0.4% and 1.1% increase, respectively.

Bharti Airtel Ltd contributed the most to the losses on the Sensex, dropping 3.3% after its March-quarter profit missed estimates, hurt by currency depreciations in African nations. ITC Ltd followed next with a 2.8% decline.

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Published: 30 Apr 2015, 01:09 AM IST
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