Stock market news: For the second straight session, domestic benchmark equity indices closed in the red due to continued outflows of foreign funds and weakness in banking, finance, and metals stocks. Investors continued to be cautious as they focused on the US Fed's decision.
The US Fed kept interest rates unchanged for the second consecutive meeting, with the US economy and labour market improving and inflation remaining well above the US central bank's target.
On Wednesday's trade, the 30-share BSE Sensex dropped to 63,680.94—a 193.99-point loss. At 19,032.60, the Nifty fell 47 points.
In a single session, investors lost around ₹1.3 lakh crore as the total market capitalisation of the companies listed on the BSE decreased to approximately ₹310.2 lakh crore from roughly ₹311.5 lakh crore.
The biggest laggards amongst the Sensex companies were JSW Steel, Bharti Airtel, Kotak Mahindra Bank, HDFC Bank, Asian Paints, Tata Steel, Power Grid, and Nestle. The main gainers were Tata Motors, Mahindra & Mahindra, Wipro, HCL Technologies, and Bajaj Finserv.
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According to Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, the pessimism can be attributed to relentless selling from the FIIs camp. Anxiety continues to build about inflation in the US – and most importantly, whether the Federal Reserve can bring prices down without sparking a recession.
Investors sentiment was also primarily clouded by lingering concerns about corporate India’s Q2 earnings which as of now is uninspiring and most importantly, they could come under heavy pressure from inflation, an economic downturn, and soaring interest rates. The bear remained in total control despite WTI Oil prices tumbling to $81 a barrel.
“If today’s price action at Dalal Street is any indication then the short-term technical outlook for Nifty remains in favor of bears. Technically, confirmation of strength only above Nifty’s biggest hurdles at 19,289 mark. Nifty’s biggest support is placed at 18,823 mark. Nifty’s 200 DMA at 18,629 mark,” added Tapse.
Parekh said Nifty further extended the losses to breach below the 19,000 zone confirming a lower top formation on the daily chart with bias once again weakening and is precariously placed with the sentiment maintained with a very cautious approach. The index has the next important support zone of 18,850 levels which once breached shall intensify the selling pressure with next crucial and major support positioned near 18,600 levels of the 200 period MA.
Bank Nifty also ended in the red after a weak opening but remained rangebound during the intraday session hovering near the 42,700 zone. As mentioned earlier, if the zone of 42,100 levels is breached decisively then trend would turn bearish with further intensified selling pressure. The support for the day is seen at 18,850 levels while the resistance is seen at 19,100 levels. BankNifty would have the daily range of 42,300-43,000 levels, according to Parekh.
Vaishali recommends buying the following stocks:
Buy Granules India Ltd at ₹337.40 with a stoploss of ₹330 and a target price of ₹352.
Sell Astral Ltd at ₹1,824 with a stoploss of ₹1,855 and a target price of ₹1,755.
Sell Ashoka Buildcon Ltd at ₹127.60 with a stoploss of ₹130 and a target price of ₹119.
Support - 18,850/18,800
Resistance - 19,100/19,150
Support – 42,300/42,250
Resistance – 43,000/43,050
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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