Sensex, Nifty take a breather after 5-day rally. What analysts say3 min read . Updated: 22 Jul 2020, 06:40 PM IST
- Axis Bank surged over 7% today, leading gains in banking stocks
- Some weakness was seen in auto stocks today
Indian stock market indices Sensex and Nifty edged lower today, snapping a five-session rally. The NSE Nifty 50 index fell 0.27% to 11,132 while Sensex declined 59 points to 37,871.52.
Motorcycle maker Bajaj Auto reported a slump in profit for the three months to June, sending its shares down as much as 3.25% and dragging the Nifty auto index 1.2% lower. Hero MotoCorp was the top loser among Nifty stocks with a 3.3% fall, while carmaker Tata Motors skid about 2.8%.
Consumer goods giant Hindustan Unilever , which reported a first-quarter profit that missed expectations on Tuesday, declined 2.9%.
Among gainers was Axis Bank, which rose over 7% after reporting better asset quality for the quarter to June.
Here is what analysts said on today's market performance:
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
"After showing sharp upmove in the last four sessions, Nifty shifted into a consolidation with volatile movement and closed the day with a slightly negative note. A small negative candle was formed at the highs with long lower shadow. Technically, this pattern indicates selling pressure near the high of 11250 and an emergence of buying from the immediate support of 11050 levels.
"Though, Nifty showed higher levels weakness today (from the high of 11238), still there is no confirmation of any reversal pattern yet at the highs. The positive chart pattern like higher tops and bottoms is intact and any minor downward correction could be viewed as a part of higher bottom process. As per this pattern, the decline should halt around 11000-10950 levels in the next few sessions."
"The near term uptrend status of Nifty remains intact. As long as Nifty holds above 10950-10900 levels, we are unlikely to see any major weakness in the market. A confirmation of reversal pattern at the highs is likely to indicate any important trend reversal in the market. Any short term upside bounce from here could find resistance around 11250-11300 levels."
Ruchit Jain, Senior Analyst at Angel Broking
“Nifty started trading with another gap up above the 11200 mark, however, the index corrected from the opening ticks in the first half an hour of trade. It then faced resistance during intraday pullback towards 11200 and corrected in the later half to register a low of 11060. Due to some recovery from the low at the end, Nifty registered a marginal loss and ended at 11132.60.
As the Nifty approached the 78.6% retracement level, it seemed that traders preferred for some profit booking as the index showed signs of boredom and corrected from the higher levels. However, the banking and the financial space kept the market on toes as some of the stocks from this space outperformed the broader markets which led to a relative outperformance in Bank Nifty. Nifty is trading near the crucial hurdle and hence it is wise for traders to book profits and take some money off the table. However, as of now, there are no signs of reversal and hence, we do not advise taking any contra trades. Next couple of sessions would be crucial to determine the near term trend and traders are advised to trade with a stock specific approach and keep booking timely profits. The near term supports for the index are placed around 11040 and 10960 whereas resistance is seen in the range of 11200-11250."
Ajit Mishra, VP - Research, Religare Broking Ltd.
"Markets ended marginally lower in a range-bound session, taking a breather after the recent upmove. After the initial uptick, the benchmark oscillated in a range however movement on the stock-specific front kept the traders busy. Nifty has almost tested the 11,250 today so some consolidation cannot be ruled out. In absence of any major event, markets would continue to take cues from the ongoing earnings season as well as global markets. Besides, it would await more data on how demand and economy recovery is panning out amid the pandemic. Traders should maintain positions on both sides and limit leveraged trades."
Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments
"We broke the 11,150 on closing basis. The markets might want to test that level again. It is a crucial level and we need to close above that level as that might act as an important resistance in the short-medium term."
(With Agency Inputs)