Stock market recap: Indian benchmark equity indices snapped a four-day winning streak on 4 August as broad-based profit-taking pulled the market off its intraday highs. BSE Sensex closed 210.08 points lower (-0.27%) at 78,428.95, while Nifty 50 declined 159.40 points (-0.64%) to settle at 24,614.90, retreating more than 700 points from its peak. Market breadth reflected a tightly contested session across the overall market, with 2,030 stocks advancing, 2,037 stocks declining, and 174 stocks unchanged.
On the sectoral front, intense selling pressure was witnessed in Nifty Private Bank (-1.5%), Realty (-2.39%), and Oil & Gas (-1.15%), whereas defensive interest provided modest resilience in Nifty Media (+2.03%) and Nifty Metal (+0.91%). Sentiment remained cautious as market participants closely monitored the ongoing Reserve Bank of India Monetary Policy Committee meeting, with the rate decision scheduled for August 5 amid expectations of a policy pause. Furthermore, institutional investors navigated the newly implemented closing auction mechanism in the equity cash segment, contributing to late-session volatility. Overall, the market exhibited disciplined profit booking near key psychological levels.
Two stock recommendations by MarketSmith India:
Buy: BlueStone Jewellery and Lifestyle (current price: ₹844)
- Why it’s recommended: Strong omnichannel jewellery brand, growing retail store network, asset-light inventory model, beneficiary of organized jewellery growth, strong digital-first presence, expanding customer base, premium product positioning, growing wedding jewellery demand, strong brand recognition, product customization capabilities, rising online jewellery adoption, expansion into new cities, long-term consumption growth tailwinds, scalable business model, and large addressable market.
- Key metrics: P/E: 227.03, 52-week high: ₹869.50, volume: ₹996.85 crore
- Technical analysis: Cup base pattern breakout
- Risk factors: High competition in the jewellery sector, dependence on consumer spending, gold and diamond price volatility, margin pressure from discounts, inventory management risks, expansion execution risks, regulatory changes in jewellery trade, high marketing and customer acquisition costs, working capital intensive business, dependence on festive and wedding demand, economic slowdown affecting discretionary spending, competition from established brands, profitability improvement challenges, valuation risk after listing, and earnings volatility during weak demand.
- Buy: ₹836–848
- Target price: ₹1,050 in two to three months
- Stop loss: ₹774
Buy: LLOYDS ENGINEERING WORKS (current price: ₹93)
- Why it’s recommended: Strong engineering and EPC capabilities, diversified industrial project portfolio, beneficiary of infrastructure growth, growing defence sector opportunities, expansion in heavy engineering business, strong order book visibility, turnaround in business performance, improving operational efficiency, capacity expansion opportunities, strong execution capabilities, beneficiary of industrial capex cycle, diversified customer base, long-term manufacturing tailwinds, healthy growth potential, and improving return ratios.
- Key metrics: P/E: 67.97, 52-week high: ₹95.10, volume: ₹143.83 crore
- Technical analysis: Trendline Breakout
- Risk factors: Dependence on industrial capex cycle, project execution delays, order inflow volatility, working capital intensive business, raw material price volatility, margin pressure from competition, customer concentration risk, regulatory and compliance risks, high capital expenditure requirements, economic slowdown affecting investments, delayed customer payments, supply chain disruptions, interest rate and financing risks, earnings volatility from project timing, and valuation risk during order slowdown.
- Buy at: ₹92–93
- Target price: ₹105 in two to three months
- Stop loss: ₹87
How Nifty 50 Performed
Indian equity markets ended on a weak note, with Nifty 50 declining 159.40 points (-0.64%) to 24,614.90, as broad-based profit-booking weighed on sentiment despite strength in a few heavyweight stocks. The session remained under pressure throughout the day, with the index slipping from an opening level of 24,703.90 to an intraday low of 24,427.95 before recovering part of its losses into the close.
The market breadth was negative, with 1,602 stocks advancing, 1,708 stocks declining, and 124 remaining unchanged, indicating a slightly bearish undertone across the broader market. On the sectoral front, Nifty Media (+2.03%) and Metal (+0.91%) emerged as the key outperformers, while Realty (-2.39%), Oil & Gas (-1.15%), FMCG (-0.88%), IT (-0.82%), and Private Banks (-0.66%) led the declines. Investors remained cautious ahead of the RBI's monetary policy outcome and continued to book profits following the recent rally, while the revised closing auction framework also contributed to heightened volatility.
Nifty 50 witnessed profit booking after testing the upper boundary of its intermediate falling trendline, forming a bearish daily candle that reflects selling pressure at higher levels. Despite today's decline, the index continues to trade above its short- and medium-term moving averages, suggesting that the broader recovery structure remains intact. Price action indicates that the recent rally has paused near a key trendline hurdle, and the market may consolidate before attempting its next directional move. From a momentum perspective, the Relative Strength Index (RSI) is positioned at 61.8, comfortably above the neutral 50 mark, indicating that bullish momentum remains intact despite the day's corrective move. Importantly, the RSI continues to hold above its signal average, reflecting underlying buying interest rather than a reversal in trend. Meanwhile, the MACD remains in positive territory, with the MACD line trading above the signal line and accompanied by positive histogram bars.
The index witnessed modest profit-booking after a decisive breakout above its downward-sloping trendline, indicating an improvement in the near-term technical structure. Following the breakout, the index rallied toward its 200-DMA at 24,774, a key long-term trend indicator that is likely to remain in focus. The broader price structure continues to favour the bulls, with the breakout suggesting a gradual shift in market sentiment. If the index sustains above 24,400, the positive momentum is expected to remain intact, opening the possibility of an extension toward 25,000–25,200 over the coming sessions. On the downside, 24,500–24,400 is expected to provide a strong cushion, and any corrective decline towards this zone is likely to attract fresh buying interest, thereby preserving the prevailing bullish bias.
How Nifty Bank Perfomed
Nifty Bank experienced notable selling pressure today, declining 0.58% to settle at 57,907.20. Banking heavyweights, including HDFC Bank, Axis Bank, and ICICI Bank, faced an intraday slide, dragging the index to a low of 57,352.65 before a late recovery trimmed some losses. Performance was primarily impacted by a cautious, defensive stance adopted by institutional investors ahead of the Reserve Bank of India’s (RBI) critical monetary policy decision scheduled for August 5th. Additionally, market friction from the newly implemented Closing Auction Session (CAS) mechanism for F&O contracts further amplified intraday volatility across private banking scripts
The index witnessed mild profit booking after extending its recent recovery, forming a modest bearish candle on the daily chart while continuing to trade above its key short-term moving averages. It remains in a higher-high and higher-low price structure, indicating that the broader near-term trend is constructive despite the ongoing consolidation. From a momentum perspective, the Relative Strength Index (RSI) is placed at 55.3, remaining above the neutral 50 mark and its signal average, indicating that bullish momentum continues to outweigh bearish pressure despite the recent pullback. Meanwhile, the MACD is hovering around the equilibrium line, with the MACD and signal lines converging after a strong positive crossover in the previous sessions.
On the technical front, immediate support is placed around the 200-DMA near 57,500, followed by stronger support in 57,450–57,300, where the 200-DMA also offers an important cushion. On the upside, 58,500-58,600 acts as the first resistance, while a decisive breakout above this hurdle could pave the way for an advance toward 59,000 in the coming sessions. The recent recovery in the broader markets, easing concerns over global risk sentiment, and improving banking sector participation are supporting the bullish setup. If the index sustains above the 200-DMA, the bias is likely to remain positive, with dips expected to attract fresh buying interest.
MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O'Neil. You can access a 10-day free trial by registering on its website.
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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 making any investment decisions.