Closing Bell: Nifty below 17,700, Sensex down 184 pts; realty stocks shine

Taking Stock: Market ends lower for the second day, realty and pharma shine

Among sectors, selling was seen in the FMCG, power and infra, while pharma and realty were up a percent each. Information technology, PSU Bank and metal each gained 0.5 percent... Read More

Benchmarks continued to trade lower for the second consecutive session, as investors were seen nervous after the dismal Q4 performance of IT companies, although IT Index recovered after yesterday’s drubbing.

Nifty is likely to trade volatile and choppy with support seen at 17573, while the index may face hurdles at 17863 mark.

Avalon Technology shares listed today at Rs. 431 per share on BSE, down 1.15% from the issue price of Rs. 436 per share.

This is in line with the expectations given the sharp profit booking after a bull run in the market has impacted the listing performance of the company. The overall market sentiment is bearish due to the market volatility which added fuel to the fire and caused listing of the company’s shares at a discount.

Avalon Tech’s debt-to-equity ratio is relatively higher compared to its peers. Also, it generates significant revenue from a limited number of customers which increases revenue concentration. Considering the current market conditions, we had advised our investors to avoid subscribing to the IPO. The company operates in a highly competitive and volatile industry but its revenue growth lagged the industry average.

However, the company is well poised for growth due to long-term growth prospects in the EMS (Electronic Manufacturing Services) Industry. Apart from this, it can also benefit from the PLI scheme which will aid in improving its financials. The investors should look out for opportunities in this company at reasonable valuations once the company’s financials improve.

Nifty continued to trade mildly negative within the previous candle range and once again closed above its 9-day exponential moving averagewhich is placed at 17,618 levels on Tuesday April 18. The benchmark index closed at 17,660 levels with a marginal loss of 0.26 percent.

After showing sharp weakness on Monday, Nifty shifted to a follow-through weakness with range bound movement. From the past two trading sessions, the 17,600 level is acting as a demand zone where prices are showing strength and witnessed closing above the same.

The index on the daily chart has retested its channel pattern breakout levels at 17,600 and the index succeeded in holding that for the second consecutive day. The momentum oscillator RSI (14) has also rested its breakout levels and firmly held above 50 levels.

Over the near term, the trend is likely to remain in a bullish to sideways tone as the bullish breakout of a falling channel pattern is still valid. The validity of the bullish pattern stands above 17,500 levels which can be considered an immediate support for the index.

The Bank Nifty index continued to witness sideways momentum and is stuck in a broad range between 42,000-42,500. The options data also confirm where 42000pe and 42500Ce are where significant put writing is visible.

The index as long as it sustains above 42000 will remain in a buy-on-dip mode and if breached will lead to a further correction towards the 41,500 level.

The Nifty opened on a positive note and consolidated for most part of the day. It traded within the range 17,863 – 17,574 of the previous trading session. The hourly Bollinger bands are contracting on account of the sideways price action and is also suggesting rangebound price action.

The daily momentum indicator has a positive crossover which is a buy signal. Thus, we are getting divergence signals from price and momentum indicator and this often results in a rangebound movement.

During this phase of consolidation, we can expect sector rotation and stock specific price action. The range of consolidation is likely to be 17,500 – 17,800 for the next few trading sessions.

Markets oscillated in a narrow range and ended marginally lower, in continuation of Monday’s decline. Meanwhile, a mixed trend on the sectoral front kept the traders busy wherein realty and pharma posted strong gains. Besides, buying in midcap and smallcap further added to the positivity. Amid all, the Nifty index settled at 17,660.15; down by 0.3 percent.

We are seeing reactions largely based on earnings, in absence of any major event. Banking and financials hold considerable weight in the benchmark and their resilience indicates further room for upside. Besides, rotational buying in index majors from sectors like auto, FMCG is providing the needed cushion in between. Considering all, we reiterate our positive view on markets and suggest utilizing this pause to add quality names.

Markets languished in negative territory for the better part of the trading session and ended weak for the second day in a row as selective profit-taking in banking, power & FMCG stocks weighed. However, buying in realty and metal stocks limited the downside.

Technically, after the gap-up opening, the market saw profit booking at higher levels which were at 17766/60113. We are of the view that 17800/60200 will now act as an important resistance area for the traders. Above that, the market can go up to 17870-18000. On the downside, selling pressure may increase below 17600/59550. Below this, the index may test 17500-17400/59300-59000 levels again. The strategy should be to buy between 17500 and 17450. For this, keep a stop loss at 17400/59000.

For the Bank Nifty 42400 and 42500 would be a resistance zone and support exists at 41800.

Benchmark indices recovered some of their intraday losses, but the Nifty is still trading below 17,700. On daily charts, the Nifty has managed to hold the 100-day exponential moving average (EMA), which is currently around 17,625. Nifty has seen a good profit booking in the last two days, with a good sell off in the first 15 minutes of trading. For Nifty,17,600-17,550 is a critical support level. If this level is maintained, we may see a slight rebound up to 17,850-17,900.

The Bank Nifty, on the other hand, had a turbulent day, failing to close over 43,300. Bank Nifty is displaying relative strength in comparison to Nifty, having managed to close in positive territory for the last two days. Bank Nifty must maintain 42,000-41,800 as a critical support level whileresistance is seen between 42,800 and 43,000.

The banking stocks pared the performance during the day while the market was grappling with the sell-off in the IT sector. However, the IT sector experienced a marginal relief rally, aided by bottom fishing, as the recent correction has made the sector attractive for long-term investment.

The pharma sector also bucked the negative trend due to an improvement in outlook along with strong movements in mid and small-cap stocks

The Indian rupee continues weakening against the US dollar following weak risk appetite and weak regional currencies. The US dollar and Treasuries erased Monday’s gain after better-than-expected Chinese growth numbers, lowering the haven demand.

Spot USDINR has been trading listlessly for the last couple of days and oscillating near 82-odd levels.

In the near term, the pair is expected to trade between 81.70 to 82.50.

Indian rupee ended lower at 82.04 per dollar on Tuesday against Monday's close of 81.97.

Benchmark indices ended lower on April 18 with Nifty below 17,700.

At close, the Sensex was down 183.74 points or 0.31 percentat 59,727.01, and the Nifty was down 46.60 points or 0.26percentat 17,660.20. About 1,841 shares advanced, 1,602 shares declined, and 115 shares were unchanged.

Top losers on the Nifty included Power Grid Corporation, UltraTech Cement, Adani Enterprises, Reliance Industries and Apollo Hospitals, while gainers were Divis Labs, HCL Technologies, IndusInd Bank, Cipla and Nestle India.

Among sectors, selling was seen in the FMCG, power and infra names, while pharma, realty up 1 percent each and information technology, PSU Bank and metal up 0.5 percent each.

The BSE midcap index rose 0.5 percent, and smallcap index added 0.2 percent.