Closing Bell: Sensex ends 200 pts in the red, Nifty around 18,000; financials, metals gain, IT top drag

Indian markets fell the least in the Asian region. Among sectors, metals and banking indices rose the most, while IT and Oil & Gas indices fell the most. Broader market continued to be subdued as advance decline ratio was negative at 0.72:1.

Nifty recovered very well from the morning lows but succumbed to afternoon selling. It faced resistance from the high of the previous day. Now 18,088-18,092 could be the resistance for the near term while 17,765 could be the support. Broader market is showing the first signs of distribution.

Nifty remained above its previous consolidation as the global sell-off failed to pull the Indian equities down. On the lower end, the falling trend line has acted as crucial support for the Nifty. Besides, the index has been sustaining above the 50 exponential moving average on the daily timeframe, confirming an uptrend. Going forward, the trend will likely remain positive as long as it remains above 17,700. On the higher end, the index may move towards 18,600 once it provides a decisive breakout above 18,100.

Gold is under pressure as the US Federal Reserve is expected to remain hawkish for longer unless there is a clear and comforting downtrend in the US inflation. The yellow metal is at the low-end of its recent range. It is vulnerable and can quickly fall to test the support at $1690/$1675. The resistance at $1730 continues to thwart any recovery attempts.

USDINR (CMP Rs 79.45 spot):Indian rupee depreciated 0.38 percent today on surge strong US Dollar and deteriorating global risk sentiments. US Dollar surged asUS CPI rose unexpectedly to 8.3 percent YoY in August compared to expectations of 8.1 percent while core CPI increased to 6.3 percent YoY in August.

We expect Rupee to trade with a negative bias amid risk aversion in global market worries that the US Federal Reserve may be more hawkish than previously expected.Investors may also take cues from PPI data from US today. However, India’s WPI inflation eased to a 11-month low of 12.41 percent in August which may support Rupee at lower levels.USDINR spot price is expected to trade in a range of Rs 78.80 to Rs 80 in next couple of sessions.

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Crude oil prices traded firm with benchmark NYMEX WTI crude oil prices were trading near $87.35 per barrel on Wednesday. Crude oil prices traded under pressure on concerns of another US Federal Reserve interest rate hike next week after consumer prices unexpectedly rose in August, outweighing support from a robust OPEC oil demand growth forecast. US crude inventories rose by 6.035 million barrels for the week ended September 9, API reported.

We expect crude oil prices to trade sideways to up with resistance at $90 per barrel with support at $86 per barrel. MCX Crude oil September contract has important support at Rs 6850 and resistance at Rs 7080 per barrel.

The initial public offering (IPO) of Harsha Engineers International was subscribed 1.36 times after it opened for subscription on September 14, with bids coming in for 2.3 crore equity shares against an offer size of 1.68 crore shares.Retail investors subscribed 1.79 times of their quota of shares and the employees bid for 1.20 times of the portion reserved for them.