Technical View: Nifty forms a 'doji' pattern; 11,042 crucial for bulls to gain control
Indian markets remained volatile throughout the trading session and closed with marginal gains on September 5. The Nifty made a doji pattern on the daily charts.
Shrikant S. Chouhan, Senior Vice-President, Equity Technical Research, Kotak Securities:
RBI has made it mandatory today for banks to link their new floating rate for home, auto and MSME loans to an external benchmark from October 1, so that the borrowers can enjoy lower rate of interest. However, that triggered a sell-off in bank stocks, especially in private banks, which closed in the negative. It also increased liquidation pressure in Bank Nifty which closed in the red by almost 0.80%, whereas Nifty 50 closed flat at 3 points over its previous close. Sensex was a shade lower after losing 0.22% over the previous day. Surprisingly, advance decline ratio stood at 2:1, which shows selling was in few large cap companies that are part of Nifty 50.
Auto stocks, specifically Tata Motors and Maruti, closed in positive territory after Minister of Road Transport and Highways announced not banning diesel vehicles. Few more announcements on public listed companies also cheered the street.
For the next few days, Nifty should trade in the range of 10,770 and 10,870. Below 10,770, Nifty would correct to 10,730 or 10,630. Above 10,870, Nifty could rally to 10,970 or 11,040. Technically, we are of the view that index is at an inflection level and major activity on higher side is more likely in the near term.
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas:
The Nifty opened on positive note and attempted to stretch higher in the beginning of the session. On the higher side, however, it couldn’t sustain above the key hourly moving averages and faced an intraday setback. Thus the Nifty posted a marginal positive close at the end of the day whereas the Sensex closed in the red.
The broader market indices especially the small cap index outperformed the benchmark for the day. Going ahead, the Nifty can witness continuation of the consolidation before it gets ready for the next leg of the decline.
On the downside, the 78.6% retracement of the recent rise, which is at 10,745 will continue to act as a key support whereas 10,920-10,950 will pose as a key hurdle zone for the near term. The overall outlook for the Nifty remains bearish with the possibility to test the August low of 10,637.
Shares of Bajaj Finance added more than 1 percent on September 5 after the financial services company allotted debentures worth Rs 1,400 crore via private placement.
Market close: BSE Sensex ended with marginal loss, while Nifty50 finished flat after traded in a narrow range throughout on September 5.
At close, the Sensex was down 80.32 points at 36,644.42, while Nifty was up 3.20 points at 10,847.90. About 1433 shares have advanced, 990 shares declined, and 133 shares are unchanged.
Tata Motors, Coal India, ONGC, BPCL and Yes Bank were among major gainers on the Nifty, while losers were HDFC, ICICI Bank, Indiabulls Housing, TCS and Kotak Mahindra Bank.
Among sectors, metal, auto, infra, oil&gas, pharma and energy witnessed buying interest, while midcap and smallcap indices also ended higher.
India Ratings assigned AA+ rating to the Punjab National Bank's Basel III Compliant Tier II bonds of Rs 5,500 crore and Senior Infrastructure bonds of Rs 2,000 crore.
Crude Update: Oil slipped towards USD 60 a barrel on Thursday after a report showed U.S. crude inventories rose unexpectedly, although hopes of progress in resolving the U.S.-China trade row lent support.
Sectors which attracted maximum foreign inflows during April-June 2019-20 include services (USD 2.8 billion), computer software and hardware (USD 2.24 billion), telecommunications (USD 4.22 billion), and trading (USD 1.13 billion), the commerce and industry ministry data showed.
European stocks hit one-month highs: European shares rose for a second straight day on Thursday, after China said it would hold trade talks with the United States, raising hopes that the two countries will make progress on a dispute that has put major economies at risk of recession, reported Reuters.
#CNBCTV18Exclusive | Govt is working on a new policy for strategic divestment; DIPAM likely to be the authority for all decisions relating to strategic stake sale: Sources tell @AnshuSharma02— CNBC-TV18 (@CNBCTV18Live) 5 September 2019
Alert: Govt has given in principle approval for 23 PSUs for strategic divestment pic.twitter.com/Cj9Yrv1Zxc
Gold Update: Gold prices dropped on Thursday as risk-on sentiment got a boost after China and the United States agreed to hold talks to end their protracted trade dispute.
Some of the stocks that make the cut include Bandhan Bank, Indigo, Jubilant FoodWorks, HDFC Life, HDFC Bank, Avenue Supermarts, ICICI Lombard, Titan, Quess Corp, Dr. Lal Pathlabs and Dixon Technologies.