The Indian market closed in the red for the fifth consecutive day on October 4. The Nifty50 index slipped below its crucial swing low of 11,247 while Sensex failed to hold on to 38,000.
The final tally on D-Street -- the S&P BSE Sensex fell 433 points to 37,673 while the Nifty50 closed 139 points lower at 11,174.
Indian market snapped three weeks of winning streak and closed in the red. For the week, the S&P BSE Senses fell 2.9 percent while the Nifty50 closed 2.94 percent down for the week ended October 4.
Investors got spooked by the quantum of rate cut which fell below market expectations as well as cut in GDP growth rate. Investors have taken a pessimistic view due to continued downward revision in GDP estimate and new stress in the banking system.
The Reserve Bank of India (RBI) revised real GDP growth for 2019-20 downwards from 6.9 percent in the August policy to 6.1 percent.
More than 300 stocks hit a fresh 52-week low on the BSE which include names like BASF India, Grasim Industries, Cummins India, Tata Sponge Iron, TCI Industries etc. among others.
In the broader market space, the S&P BSE Midcap index, and 3.9 percent plunge recorded in the S&P BSE Smallcap index.
In the smallcap space, as many as 138 stocks fell 10-30 percent which include names like Praj Industries, DCB Bank, Eros International, JustDial, Dish TV India, JM Financial, Rolta India, IDFC Ltd, Unitech, Delta Corp, Dewan Housing, and Indiabulls Ventures.
On the macro front, the foreign exchange reserves touched a record high of $434.6 billion as on October 1. According to the latest weekly data, the reserves surged by massive $5.022 billion to $433.594 billion for the week to September 27.
The Indian Rupee on October 4 closed almost flat at 70.88 against the US dollar after the RBI in a widely expected move cut key interest rates by 0.25 percentage point.
On the institutional front, FPIs were net sellers in Indian markets for Rs 682 crore while the DIIs were net buyers to the tune of Rs 606 crore, provisional data showed.
Technical view:
Indian market closed nearly 3 precent lower for the week ended October 4.
The index formed a Long Black Day on the daily charts.
The index took support near 20-DMA, trades below crucial short term moving averages.
The index slipped below its crucial swing low of 11,247 which also led to the selling pressure.
Technically speaking, Nifty50 may not regain strength unless it registers a close above 11,400 kinds of levels.
On the downsides, if it settles below 11,158 levels then eventually it should have a logical target placed around 10,875.
A breach of 11,110 on closing basis (swing low of Mat) shall accentuate the selling pressure further towards 10,875.
Experts suggest that traders should avoid long positions and to consider positional shorts on a pull back towards 11,300 or on breach of 1,110 on closing basis could take the index towards 10,900.
Three levels: 11,110, 11400, 11554
Max Call OI: 11500, 12000
Max Put OI: 11000, 11200
Stocks in news:
A clutch of top strategic suitors have submitted non-binding bids for Emami Cement, which has been put up for sale by the Emami Group, sources in the know told Moneycontrol.
Drug firm Glenmark Pharmaceuticals on October 5 said it has received a warning letter from the US health regulator for its Baddi facility in Himachal Pradesh.
IT major Wipro on Friday said it has completed the acquisition of US-based International TechneGroup Incorporated (ITI).
Tata Motors on Friday said it has bagged orders to supply 300 electric buses from Ahmedabad Janmarg (AJL).
Technical recommendations:
We spoke to Religare Broking and here’s what they have to recommend:
HCL Technologies: Buy| LTP: Rs 1,079.10| Target: Rs 1,130| Stop Loss: Rs 1,045| Upside 4%
Biocon: Buy | LTP: Rs 231.10 | Target: Rs 256 | Stop Loss: Rs 220 | Upside 10%
Bharat Heavy Electrical: Sell Oct Futures | LTP: Rs 46 | Target: Rs 43 | Stop Loss: Rs 51 | Downside 6%
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