Technical Outlook by Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan:
The Nifty witnessed gap up opening and ended the trading session at negative note. After an initial dip, the index recovered from the low but it witnessed a sharp decline in the last hour of the trading session and ended the trading session near the low point of the day.
On the way down, the lower end of the channel has acted as a strong support. Currently, the index has closed near the lower end of the channel. In the near term, 10,701 – 10,726 will be a crucial support zone. If the index breaks the low of 10,701 then it is likely to resumes its down move which drag the index lower to 10,550 and subsequently towards the low of 10,417.
However, if the holds above the support zone then pullback or sideways consolidation is possible. On the way up, 10,810 – 10,834 will be a crucial resistance zone in the near term. Overall, short term chart structure of the index is bearish. We maintain our bearish outlook on the index for the short term with a reversal placed at 10,930.
Market View by Abhijeet Dey, Senior Fund Manager-Equities, BNP Paribas Mutual Fund
Key benchmark indices in India started the day on a positive note and traded with gains in morning trade only to reverse trend and end the day in the red.
Both the benchmark Sensex and the Nifty finally closed the day with marginal losses.
According to the minutes released by Reserve Bank of India from their most recent policy meet, inflation risks have increased since April, 2018. This information, in the backdrop of an ongoing OPEC meeting that could expand crude production, left investors uncertain and weary of market direction.
All the sectoral indices on the National Stock Exchange (NSE) witnessed sharp losses with most of them losing over 1 percent at close.
Market Outlook: "Market continued to be under pressure as trade tensions between the US and China is getting escalated. Emerging markets including India were under performing due to FIIs selling," Vinod Nair, Head of Research, Geojit Financial Services told Moneycontrol.
OPEC meeting tomorrow will be a key event, relaxation in production cuts will provide some relief to Indian markets, he said.
Global Update: Asian markets closed mixed as investors monitor trade developments between world's largest economies US and China. China's Shanghai Composite, Hong Kong's Hang Seng and South Korea's Kospi closed down over a percent while Japan's Nikkei gained 0.6 percent and Australia's ASX 200 rose 1 percent.
European stocks were lower ahead of OPEC meeting and ECB rate decision. Germany's DAX was down 1 percent and France's CAC down half a percent at the time of writing this article.
Oil prices corrected sharply ahead of likely increase in crude output in the OPEC meeting. Brent crude futures, the international benchmark for oil prices, were down 1.65 percent at $73.51 a barrel.
Market Closing: Benchmark indices ended lower after consolidation, as investors monitor trade developments between US and China. The OPEC decision will also be closely watched.
The Sensex fell 114.94 points to 35,432.39 and the Nifty shed 30.90 points to 10,741.10. More than two shares declined for every share rising on the BSE.
IOC, HPCL and BPCL gained 3-4 percent on correction in crude oil prices.
ICICI Bank and Reliance Industries gained more than a percent while HDFC Bank rose half a percent.
SBI, L&T, ITC, Maruti, M&M, Dr Reddy's Labs and Axis Bank were under pressure.
Nifty Midcap index fell over 100 points.
Balrampur Chini, Dhampur Sugar, Union Bank, Indian Bank, PNB, Avanti Feeds, Strides Shasun, NCC, Just Dial, Indiabulls Real Estate, Adani Power, IDBI Bank, Equitas Holdings, Bata and Escorts slipped up to 7 percent.
VIP Industries, InterGlobe Aviation, Firstsource and Mphasis gained up to 5 percent.
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