Stock market today: Sensex, Nifty 50 end lower on profit booking; broader markets outperform

Stock market today: After setting a new high last week, the domestic equity benchmark indices, the Sensex and Nifty 50, closed lower on Monday as investors took profits amidst an overall weak trend in Asian markets.

The 30-share BSE Sensex ended lower by 168.66 points or 0.24% at 71,315.09 level while the Nifty 50 closed at 21,418.65 level, down 38 points or 0.18%.

Following two sessions of 2% gains, banks and financials lost roughly 0.5% to 0.4%. Realty stocks fell 1%, while information technology stocks dropped 0.3%, ending a two-session surge.

On the broader market front, the Nifty Midcap 100 closed 0.22% higher, and the Nifty SmallCap 100 closed 0.56% higher outperforming the benchmark indices.

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The majority of global equities fell on Monday, while US futures and oil prices marginally increased, according to an AP news report. Investors are keeping a close eye on the start of the Bank of Japan's (BOJ) two-day meeting in case the central bank modifies its long-standing policy of maintaining near-zero interest rates.

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For months, investors have been making speculations that rising prices would eventually force Japan's central bank to halt its highly loose monetary policy. However, it's unlikely that much will change as a result of the meeting, which ends on Tuesday.

The Nikkei 225 index in Tokyo dropped 0.6% to 32,758.98. The Shanghai Composite index fell 0.4% to 2,930.80, while Hong Kong's Hang Seng fell 1% to 16,629.23. Australia's S&P/ASX 200 fell 0.2% to 7,426.40 in other Asian markets.

 Seoul's Kospi increased by 0.1% to 2,566.86, while Bangkok's SET decreased by 0.3%.

According to Vinod Nair, Head of Research at Geojit Financial Services, the market started on a subdued note as concerns over oil supply disruptions through the Red Sea and elevated valuations dented investor sentiment. On the global front, attention will be directed towards BOJ monetary policy and UK inflation data.

“We expect a near-term consolidation in the market due to an unfavourable risk reward after the recent rapid performance, concerns over El Nino, and a slowdown in world GDP,” said Nair. 

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Top Nifty 50 gainers and losers today

As many as 16 stocks settled in the green in the Nifty 50 index while the rest 34 ended in red.

Shares of Bajaj Auto Ltd (up 2.87%), Hindalco Industries Ltd (up 1.57%), Sun Pharmaceutical Ltd (up 1.46%), Adani Ports and Special Economic Zone Ltd (up 1.06%) and Reliance Industries Ltd (up 0.98%) ended as top gainers. On the other side, Power Grid Corporation of Ltd (down 2.11%), ITC Ltd (down 1.36%), Tech Mahindra Ltd (down 1.23%), ICICI Bank Ltd (down 1.20%), and JSW Steel Ltd (down 1.17%) were among the laggards.

Sectoral indices today

Amongst sectoral indices, Nifty Bank, Nifty Realty, Nifty PSU, Nifty Financial Services, Nifty FMCG, Nifty IT closed in red, and were down 0.3% to 1%.  On the other side, Nifty Media, Nifty Pharma, Nifty Metal, Nifty Oil & Gas, and Nifty Auto were up 0.05% to 1.18%.

Experts' Views on Markets

According to Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities, Nifty 50's bullish run stops at daily top albeit lack of follow-through buying, but Fed rate cut bets keeps bears at bay.

Strictly speaking, Nifty 50 and Bank were seen hitting pause as bulls’ stepped back amidst extremely overbought technical conditions.

Digging deeper, Nifty 50 exhibited mild profit booking after two straight days of solid gains.

Nifty Realty index (-0.99%) and Nifty PSU Bank index (-0.83%) were the drags amongst sectoral indices.

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"Honestly speaking, the sentimental, fundamental and technical analysis still suggest the FOMO should drive the king Nifty to 21,500 with an inter-month perspective. Well, amidst overbought technical conditions, the benchmark may consolidate in the near term but that said, the near-term outlook for Nifty continues to be in favor of the bulls but on any steep corrective declines.

The super bullish-trend is on and investors need to be bold and explore growth opportunities," explained Tapse.

According to Kunal Shah, Senior Technical & Derivative analyst at LKP Securities, the Bank Nifty index encountered resistance around the 48000 level, resulting in an inability to sustain at those higher levels, leading to some selling pressure. The immediate support for the index is positioned at 47800. A breach below this level could intensify the selling pressure, potentially pushing the index towards the 47,400/47,000 marks.

"On the daily chart, the Nifty 50 has formed a Bearish Harami candlestick pattern, suggesting a potential interruption in the ongoing rally. Additionally, the RSI indicator on the hourly timeframe has undergone a bearish crossover within the oversold zone, hinting at a waning bullishness in the market. A decline below 21,350 could lead a correction towards 21,220/21,100 in the short term. Conversely, resistance is anticipated at 2,1500 on the higher end," said Rupak De, Senior Technical analyst at LKP Securities.

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