Early on D-Street | Market shows signs of weakness; follow stock-specific approach

Market barometer Sensex snapped the winning run of the last three consecutive sessions on December 16 due to profit-booking at higher levels in the absence of any fresh trigger.

Sensex and Nifty remained volatile during the session, eventually settling in the red.

The BSE Sensex fell 71 points, or 0.17 percent, to 40,939 while the Nifty50 closed with losses of 33 points, or 0.27 percent, at 12,054. BSE Midcap and Smallcap closed with losses of 0.46 percent and 0.20 percent, respectively.

On the sectoral front, IT, Realty and Teck logged gains, but rest others failed to perform. FMCG, Telecom, Auto, Consumer Durables and Metal indices fell by over a percent.

"We expect the Indian markets to remain under pressure in the near-term, as there are no visible positive triggers, which could boost investor sentiments. Further, market participants would continue to track global factors such as the US-China trade deal, crude oil price and currency movement. We would recommend investors to follow a stock-specific approach," said Ajit Mishra, VP - Research, Religare Broking.

A long negative candle was formed on December 16 with a gap up opening, which indicates the formation of dark cloud cover type candle pattern. Technically, the formation of such a pattern at the swing highs or near the hurdles indicates further weakness in the market ahead, said experts.

The rupee reversed all its early gains and settled 17 paise down at 71.00 against the US currency on December 16, following rising crude oil prices and fag-end selling in domestic equities.

On the institutional front, foreign institutional investors (FIIs) bought shares worth Rs 728.13 crore, while domestic institutional investors (DIIs) sold shares of worth Rs 796.38 crore in the Indian equity market on December 16, provisional data available on the NSE showed.

Wholesale prices based inflation rose to 0.58 percent in November, as against 0.16 percent in October due to an increase in prices of food articles. The annual inflation, based on the monthly wholesale price index (WPI), was at 4.47 percent during the same month a year ago (November 2018).

The rate of price rise for food articles rose to 11 percent during the month as against 9.80 a month earlier, while for non-food articles it eased 1.93 percent from 2.35 percent in October, showed the data released by the Ministry of Commerce and Industry on Monday.

For manufactured products, the wholesale inflation remained static (-)0.84 percent during the month under review.

Nifty faced resistance near the all-time high of 12,158. The daily upper Bollinger Band, which has gone flat over the last few sessions, also acted as a barrier on the upside. Consequently, the bulls lost the ground and Nifty slipped in red.

At the end of the day, the index formed a Dark Cloud cover – a bearish candlestick pattern on the daily chart. As per Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan by BNP Paribas, 12,134–12,158 now becomes a significant resistance zone.

Ratnaparkhi said If the bulls manage to overcome this hurdle zone, then the index can march towards the short-term target of 12,350. On the flip side, the recent gap area of 12,023-12,005 is an immediate support zone to keep a tab on.

Three levels: 12,046, 12,158, 12,200

Max Call OI: 12,000, 12,100

Max Put OI: 12,000, 11,800.

Cipla: The company acquired trademark rights of Vysov.

Shriram Transport:S&P cut the company's outlook to 'Negative' from 'Stable'.

Raymond:Promoter Group acquired additional 5.16 percent equity via CCPS on December 12.

Equitas Holdings: Equitas Small Finance Bank filed IPO papers with SEBI.

JM Financial: The company will consider fundraising by the way of issue of equity shares or any instrument.

We spoke to HDFC Securities and here’s what they have to recommend:

Muthoot Finance| Buy | LTP: Rs 720.15 | Target price: Rs 780 | Stop loss: Rs 686 | Upside: 8%

Nesco | Buy | LTP: Rs 643 | Target price: Rs 710 | Stop loss: Rs 608 | Upside: 10%

Kansai Nerolac Paints | Buy | LTP: Rs 544.20 | Target price: Rs 600 | Stop loss: Rs 515 | Upside: 10%