Overall benchmark indices have been in a tight range and that rangebound or consolidation is expected to continue in short term, experts suggest.
PSU Bank index slipped 2 percent as total exposure announced by PSU banks so far has been more than Rs 8,500 crore to PNB fraud case.
We believe markets will see some time wise correction from current levels in the broader range of 10,300-10,700 levels over the next few weeks, says Vikas Jain
Maximum call open interest (OI) of 52.38 lakh contracts stands at strike price 10,600, which will be a resistance for February series.
With bearish undertone prevailing further downside could not be ruled out. Thus low-risk hedge strategy Long Put Condor is recommended in Bank Nifty.
The Nifty has retraced only 35 percent of the decline (especially because of PNB's fiasco that panned out in the last two sessions). Hence, the index is poised for a pullback, which may also trigger FII inflow.
Traders are continuously advised to remain light and should ideally avoid any kind of bottom fishing in the near term.
But investors and advisors who believe that equity investments are capable of generating linear returns over short periods of time would be best advised to revisit their beliefs.
"It would be advisable to diversify your portfolio and follow an asset allocation approach to investing for your goal, and thereby optimize your risk and returns," says Sampath Reddy, Chief Investment Officer, Bajaj Allianz Life Insurance.
"The current Indian bull market (which has delivered cumulative returns to date of 145 percent over the last four years) is all set for a final frenzy given post the “pause” in the closing months of 2016," says Saurabh Mukherjea is the CEO of Ambit Capital.
The index consolidated throughout this week, a pattern which is likely to continue in the coming week as well unless it breaks above 10,600.
Both benchmark indices closed flat for the week, after losing nearly 6 percent in previous two weeks.
Gupta expects Brent crude to be in the range of USD 55-60 a barrel for rest of 2018.
The stocks that hit new 52-week high on NSE included KEC International and Polaris Consulting among others while Dena Bank, Punjab National Bank and Syndicate Bank were some of the stocks that hit fresh 52-week low.
Punjab National Bank lost another 2 percent on top of 21 percent fall in previous two consecutive sessions. Gitanjali Gems tanked 19 percent on top of 20 percent correction in previous session.
According to Pivot charts, the key support level for Nifty is placed at 10,498.3, followed by 10,451.1. If the index starts to move higher, key resistance levels to watch out are 10,605.4 and 10,665.3.
10,000 is the first major support below which 9,200 is possible. 9,200 is close to a 61.8 percent retracement of the entire move from the December 2016 bottom to the February 2018 top.
PNB shares lost another 13 percent after detecting transaction fraud of Rs 11,333 crore in a Mumbai branch.
"The effective date for mandatory submission of PAN and Aadhaar number with requisite documents at the time of opening new folio or account, will now be April 1, 2018 instead of February 15, 2018. "Accordingly, no new folio account will be opened without the said documents effective April 1, 2018," BSE said in a statement.
Investors have nothing to worry if interest rates rise in tandem with growth emerging markets (EMs) have nothing to fear.
PNB fell over 11 percent after management gave clarification over transaction fraud worth Rs 11,333 crore.
A break above 10,600 on Nifty could turn the tables in favour of the bulls while a close below 10,398 could extend the selling pressure, which could take the index towards 200-DMA.
A list of important headlines from across news agencies that could help in your trade today.
Traders are advised to stay light and cautious as the index could well swing in either direction.
The broader markets also erased gains in last hour of trade but managed to close the session with minor gains as BSE Midcap and Smallcap indices gained 0.2 percent each.