We all hoped for a stable start to 2019 which we got as the market rebounded in Tuesday’s session but that wasn’t the case for Wednesday which saw Nifty taking support near its 50-days exponential moving average (EMA) while Sensex breached 36,000.
The final tally on D-Street – the S&P BSE Sensex closed 363 points lower to end at 35,891 while the Nifty50 ended 117 points to close at 10,792. The 200-DMA for Nifty is placed around 10780.
Well, there are a lot of reasons which weighed on markets. Weak global cues to start with was a major overhang in the morning as most of the global markets resumed trading after New Year holiday.
Apart from that, globally, weak China factory data and risk of a further slowdown in the world economy impacted global market. Metals & Auto index were the worst performers, down over 3% each.
Technically, the Nifty50 bounced back from its crucial moving average placed at 50-days EMA, and as long as the index trades below 10800, the chance of further profit booking cannot be ruled out.
The index has been making lower highs and lower lows which is not a strong sign for the bulls; hence, investors should tread cautiously in the next few days.
On the broader market front, the BSE Midcap index performed inline with the benchmark ending with losses of 1.3%, whereas BSE Smallcap showed some resilience and ended with losses of 0.7%.
The rupee fell sharply against the US dollar and settled at 70.17 a dollar, down 74 paise from its previous close of 69.43.
On the institutional front, FPI were net sellers in Indian markets for Rs 621 crore while DIIs were also net sellers to the tune of Rs 226 crore.
Technical View:
Nifty forms a bearish candle on daily charts
The weakness is likely to continue which could take the Nifty near 10,500 levels again if the index trades below 10,923 levels, experts said.
Three levels to watch: 10735, 10780, 10900-10950
Max Call OI: 11200, 11000
Max Put OI: 10500, 10000
Stocks in news:
Bank of Baroda announced on January 2 the fair equity share exchange ratio for shareholders of Vijaya Bank and Dena Bank. Bank of Baroda said Vijaya Bank shareholders will receive 402 shares of BoB for 1,000 shares held of Vijaya Bank.
PNB Housing Finance said on Wednesday it has raised USD 265 million (Rs 1,853 crore) through external commercial borrowing (ECB) route last week.
Indian state-owned fuel retailers, including Indian Oil Corp. Ltd, Hindustan Petroleum Corp. Ltd (HPCL) and Bharat Petroleum Corp. Ltd (BPCL) have stopped absorbing a government-mandated cut of Rs 1 a litre in their marketing margins on the sale of petrol and diesel due to a steep fall in global crude oil prices, Reuters reported quoting sources.
Technical Recommendations:
We spoke to Bonanza Portfolio Ltd and here’s what they have to recommend:
Balrampur Chini Mills: Buy| CMP: Rs.104.50 | Target: Rs 114-116.50| Stop Loss: Rs 100| Return 11%
Colgate Palmolive India: SELL| CMP: Rs 1301.80 | Target: Rs 1200| Stop Loss: Rs 1361| Return 8%
Maruti Suzuki India Ltd: SELL| CMP: Rs. 7267| Target: Rs 6800| Stop Loss: Rs 7486| Return 6.30%
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