Stock Market Today: Sensex, Nifty fall on weak global cues; BSE Midcap hits 52-week high
Sensex closed 208 points, or 0.34 per cent, lower at 61,773.78 while the Nifty closed at 18,285.40, down 63 points, or 0.34 per cent.
Weak global cues amid lingering debt ceiling issues in the US and concerns over inflation dragged equity benchmarks the Sensex and the Nifty lower on Wednesday (May 24) with banking and financial heavyweights among the top losers.
US stock futures and European markets were trading lower when the Sensex closed as the US debt ceiling talks have failed so far, souring the mood of the market, while Britain's inflation data came in stronger than expected, giving a jolt to expectations of a pause in rate hikes.
“Representatives of President Joe Biden and congressional Republicans ended another round of debt ceiling talks on Tuesday with no signs of progress as the deadline to raise the government's $31.4 trillion borrowing limit or risk default ticked closer,” reported Reuters.
Britain's consumer prices rose by 8.7 per cent year-on-year in April. A Reuters poll of economists had forecast that Britain's headline CPI annual rate would drop to 8.2 per cent in April.
Sensex opened 148 points lower at 61,834.28 and swung between gains and losses during the session, taking a swing of 446 points intraday.
The index closed 208 points, or 0.34 per cent, lower at 61,773.78 while the Nifty closed at 18,285.40, down 63 points, or 0.34 per cent.
Shares of HDFC Bank, ICICI Bank, HDFC, Reliance Industries and Kotak Mahindra Bank ended as top drags on the Sensex.
However, mid and smallcaps ended with mild gains. The BSE Midcap index rose to hit its 52-week high of 26,585.18 before settling 0.13 per cent higher at 26,488.42 while the Smallcap index closed with a gain of 0.10 per cent.
While the benchmark indices ended lower, as many as 116 stocks, including ITC, IndusInd Bank, TVS Motor Company, Cummins India and CG Power and Industrial Solutions, hit their 52-week highs in intraday trade on BSE.
Meanwhile, crude oil prices rose after data showed US inventories and fuel supplies tightening and following a warning from the Saudi energy minister to speculators raised the prospect of further OPEC+ output cuts, reported Reuters. Brent Crude traded over two per cent higher near the $78 per barrel mark.
Rupee, on the other hand, rose 13 paise to close at 82.67 per dollar.
Top Nifty Gainers and Losers
Shares of Sun Pharma (up 1.98 per cent), Dr Reddy's Labs (up 1.31 per cent) and ITC (up 1.13 per cent) ended as the top gainers in the Nifty index.
On the flip side, shares of Adani Enterprises (down 6.03 per cent), Adani Ports (down 2.21 per cent) and Tata Motors (down 1.49 per cent) ended as the top losers.
As many as 30 stocks ended higher in the Nifty pack while 20 ended with losses.
Sectoral indices
Among the sectoral indices, Nifty Metal fell 1.56 per cent, followed by Nifty Financial Services (down 0.80 per cent) and Nifty Bank (down 0.63 per cent).
On the other hand, Nifty Consumer Durables (up 1.40 per cent), Pharma (up 1.03 per cent) and Healthcare (up 0.95 per cent) ended with healthy gains.
Expert's Views on Markets
"The domestic market experienced a short-lived rally that was overshadowed by subdued global market sentiment. US Treasury yields rose due to concerns over stalled US debt ceiling talks and hawkish comments from US Fed officials, which reduced the chances of a rate pause. European markets also declined, triggered by higher-than-expected UK inflation figures that bet on more rate hikes by the Bank of England," said Vinod Nair, Head of Research at Geojit Financial Services.
Technical Views on Markets
Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas pointed out that the Nifty has been trading in the range of 18,400 – 18,000 for the past couple of weeks. The pullback that it witnessed after taking support at the 20-day moving average fizzled out around the 18,400 mark because the momentum indicator still has a negative crossover.
"Price and momentum indicators are currently not in sync with each other which can lead to a consolidation in the near term. Overall, we still believe that the Nifty is in a consolidation mode and the range of consolidation is likely to be 18,000 – 18,400. In terms of levels, 18,420 – 18,450 shall act as the immediate hurdle while 18,200 – 18,150 is the crucial support zone to watch out for on the downside," said Gedia.
"We see short straddles created at the 18,300 level. A prudent strategy to play for tomorrow would be to short the 18,300 short straddles when the index opens between 18,260 and 18,290 and buy a PE of 18,250 to take care of any downside risk," said Rahul Ghose, Founder & CEO – Hedged, an algorithm-powered advisory platform.
"It is important to make sure that we get at least 80 points of credit on the short straddle and less than 20 points of debit on the bought PE side. This will ensure that we stay profitable as long as the market stays below 18,360 for the expiry day," said Ghose.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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