Closing Bell: Market snaps 5-day winning streak, Nifty ends below 16,700; metals worst hit

Despite tepid market condition Nifty opened on a positive note but due to consistent profit booking at higher levels it corrected sharply. From the days highest level the Nifty shed over 265 points.

Correction was seen among sectors like metals, oil and gas whereas some buying interest was seen in selective auto and consumption space.

Technically, in the short term market is still on the bullish side. However, on daily charts Nifty has formed a bearish candle which indicates strong possibility of temporary weakness.

We are of the view that, as long as the Nifty holding the levels of 16500-16400 the uptrend is intact. On the higher side the immediate hurdle would be 16900-16950.

On the downside, any fall below 16400 may increase further weakness up to 16350-16300. In the coming days, the markets are expected remain volatile hence level based trading would be the ideal strategy for the day traders.

Indian equity markets end a five-day winning streak on the back of weak global cues and rising US bond yields ahead of the FOMC meeting outcome on Wednesday. We were outperforming due to a sharp fall in crude oil prices and a pause in selling by FIIs however Nifty and Banknifty were trading near their important resistance levels after a smart pullback.

Nifty had an immediate resistance around its 200-DMA which is currently placed at 16980 level while Bank Nifty was trading near its 20-DMA therefore we saw selling pressure at higher levels.

On the downside, Nifty has a strong demand zone at 16500-16400 area while 34300-34000 is a critical support zone for the Bank Nifty. It seems that the market is factoring in a positive outcome on the Russia-Ukraine front as there is a sharp fall in commodity prices however the slowdown in China is also causing pressure on commodity prices which is a tailwind for the Indin equity markets. The most important event apart from the Russia-Ukrain war is the FOMC meeting outcome.

The benchmark index wiped out all the early gains and traded lower for the day due to weak cues from the US & UK market. The

Technically, the stock has formed a Bearish Engulfing Candlestick pattern on the daily chart and slipped below the Middle Bollinger Band formation, which suggests a further downside move.

In addition, the index has also shifted below 21-Days EMA on the daily chart. However, an indicator MACD is showing position crossover. At present, the index has support at 16400 levels while resistance comes at 16930 levels. On the other hand, Bank Nifty has support at 34000 levels while resistance at 35700 levels.

Benchmark indices finally ended its winning streak as Nifty50 closed at 16663 and sensex closed at 55777. Investor sentiments got a hit amid negative global market cues. The news of rising covid cases and lockdowns in major Chinese cities has sent negative signals to the market. Meanwhile, US federal bank has a two day meet starting from today. General market sentiments expect a 25bps hike in interest rates to curb the situation of rising inflation.

Investors also took a note of premature news that India is considering to buy Russian crude oil at discounted prices by facilitating Rupee-Ruble trade. The government has also announced the beneficiaries of the auto PLI scheme. Some prominent names that bagged the approval are Maruti Suzuki India ltd, Bharat Forge, Bosch, Pricol, Lumax among many others.

On the technical front key resistance levels for Nifty50 is 17,000 and on the downside 16,600 will act as strong support. For Bank Nifty key resistance level is 35,700 and on the downside 34,000 will act as strong support.

Nifty formed a dark cloud cover on the daily chart as it found resistance around 200DMA on the daily chart.

On the lower end, it found support at the upper band of the falling channel.

Going forward, the index may remain in the green as long as 16640 is held decisively. On the higher end, resistance is visible at 16900-17000.

The world equity market lost its momentum as new financial & trade sanctions were imposed on Russia along with the suspension of gas imports. It is a setback for the market sentiment, which was improving in anticipation of a truce in war.

The Indian market was outperforming due to ease in commodity prices. World markets are also lower ahead of the US Fed meeting in which the market widely expects FOMC to initiate a rate hike.

The benchmark indices broke five day winning momentum with Nifty closing below 16700 dragged by metal, oil & gas and IT stocks.

At close, the Sensex was down 709.17 points or 1.26% at 55,776.85, and the Nifty was down 208.30 points or 1.23% at 16,663. About 1296 shares have advanced, 2014 shares declined, and 95 shares are unchanged.

Hindalco Industries, ONGC, Tata Steel, Coal India and JSW Steel were among the top Nifty losers, while gainers were Tata Consumer Products, M&M, Cipla, Shree Cements and Maruti Suzuki.

Among sectors, except auto all other sectoral indices ended in the red with IT, metal, power and oil & gas indices down 1-4 percent. The BSE midcap and smallcap indices lost 0.5 percent each.

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