Closing Bell: Sensex falls 660 pts, Nifty holds 10,600; banks, metal worst hit

Taking Stock: Financials drag market; Sensex plunges 600 points, Nifty holds 10600

Sectorally, the S&P BSE Bankex fell 3.06 percent, followed by the S&P BSE Power index which was down 2.7 percent, and the S&P BSE Finance index plunged 2.5 percent.... Read More

We’re not surprised by the fall as markets were signaling exhaustion at the higher levels. Indications are in the favour of a further decline and Nifty could test 10,500 levels. Though the global markets are still buoyant, rising cases in India have raised fears of the imposition of lockdown in certain parts, which could dent the pace of recovery. We advise continuing with the stock-specific trading approach and accumulating defensive on dips.

Nifty index opened gap down in line with the weakness in Global market and drifted towards 10550 zones. It formed a Bearish candle on daily scale and corrected by more than 200 points. It has broken its rising support trend line by connecting all the recent swing low of 7511, 9004, 9544, 9845, 10250, 10300 and 10700 zones. It has also given a consolidation break down by holding below its previous weekly support of 10650 zones. Mechanical indicator RSI has given a negative crossover and showing a sign of profit booking decline. Now, till it holds below 10700 zones, weakness could be seen towards 10500-10450 zones while immediate hurdle exists at 10750 then 10850 zones.

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Indian benchmark equity indices had their biggest single-day drop since early-June, tracking weakness in Asian peers. The NSE Nifty 50 index ended 1.79% lower at 10,609.

Technically, Nifty has shown weakness after a long time. On downmoves, it could take support at 10484.

The markets exhibited high correlation with the global markets and with the virus infections hitting day highs in India, the uncertainty caught up with the markets. Global markets were weak following rising infections in US and US-China tensions being back in the news. Indian markets were also worried about the increasing number of localized lockdowns which would in turn again slowdown the predicted recovery for businesses. Volatility is expected to remain and investors are advised to be cautious and be stock specific in their trades.

The Nifty broke the level of 10650 on a closing basis. This could result in some downward movement. We could expect 10480-10500 as the next level of support and thereafter 10350. On the upside, in order to resume its uptrend, the markets would need to go past 10750 on a closing basis.

Dalal Street corrected close to 2% behind weakness in financials and metal stocks. Despite the two Telecom Majors holding firm ahead of key events, we witnessed profit booking in key auto stocks as their volume numbers are anyways known to the street for the first quarter.

: Benchmark indices on July 14 witnessed profit booking which dragged Nifty below 10650 level on the back of selling pressure seen in the auto, bank and metal stocks.

At close, the Sensex was down 660.63 points or 1.80% at 36033.06, and the Nifty was down 195.30 points or 1.81% at 10607.40. About 820 shares have advanced, 1829 shares declined, and 116 shares are unchanged.

IndusInd Bank, Axis Bank, Eicher Motors, Zee Entertainment and Maruti Suzuki were among major losers on the Nifty, while gainers were Dr Reddy's Labs, Titan Company and Bharti Airtel.

Except pharma, all other sectoral indices ended in the red, while BSE Midcap and Smallcap indices ended 1 percent lower.

Steel Strips Wheels has bagged firm export orders for over 29,000 wheels for EU Caravan Trailer Market to be executed in August from its Chennai plant.

Oil prices fell on Tuesday on worries that new restrictions to stem surging U.S. and Asian coronavirus cases could threaten a recovery in fuel demand just as OPEC+ producers prepare to increase output from August.

Wholesale prices fell by -1.8% y/y in June, as a severe demand crunch and sharp fall in international commodity prices weighed on wholesale inflation. Both retail and wholesale inflation surprised to the upside versus expectations in June, as supply disruptions seems to have had a more pronounced impact on prices than anticipated. Details show that a normalisation in food prices is starting to take place as summer seasonalities begin. Fuel and power prices rose after falling for five straight months, likely signalling the end of the deflationary cycle in these areas. Core prices remain under control, though some signs of upside pressure is noticeable in manufactured food products, chemicals and basic metals.

Guardian Advisors acquires additional 8.48% stake in Eveready Industries. Guardian Advisors now holds 19.84% stake in the company, reported CNBC-TV18.

Dr. Reddy’s Laboratories announced the launch of Over-the-Counter Nicotine Polacrilex Lozenges, 2 mg and 4 mg, the store brand version of Nicorette Lozenges in the US market.