Closing Bell: Nifty below 18,300, Sensex falls 208 pts; metals drag, pharma gains

Taking Stock: Market snaps 3-day gains; Nifty below 18,300, Sensex falls 208 pts

The BSE midcap and smallcap indices ended on a flat note.... Read More

Markets traded volatile and settled marginally lower, taking a breather after the recent up move. After the initial downtick, the Nifty oscillated in a range and finally settled around the day’s low at 18,285.40 levels. Most sectors traded in sync with the trend and ended lower wherein metal, banking and financials were among the top losers. Meanwhile, the outperformance continued from the broader front as they managed to end flat to marginally in the green.

With the major earnings behind us, participants are eyeing global markets for cues but they’re not offering any clarity as of now. In between, sectors like banking and financials, which have considerable weight in the index, are largely dominating the move. While the tone is still positive, we feel participants should limit positions and wait for further clarity.

Weakness in global markets dragged domestic indices down as the overhang of the US debt ceiling negotiation influenced sentiments. Nifty opened lower and witnessed selling pressure throughout the session to close with a loss of 63 points at 18,285 levels. Broader markets were mixed with Midcap 100 up 0.2 percentwhile small-cap 100 ended flat to negative. Most sectors ended in green with Pharma and Consumer Durables up 1 percenteach.

Domestic markets have taken pause with Nifty facing minor resistance at a higher level of 18400-450 zones. However, the overall positive structure remains intact, with a view of buying on dips. Globally, Investors would also take direction from the Fed meeting minutes to be released later today.

The Nifty index has been firmly held by bears, indicating their strong control over the market. The index is currently facing significant resistance at the level of 18400, which has proven to be a challenging barrier to overcome. The ongoing battle between bulls and bears has resulted in the index trading within a consolidated range between 18200 and 18400 levels.

However, a break above or below this range has the potential to trigger trending directional moves in the market. Traders and investors should closely monitor the index for a potential breakout or breakdown, as it may indicate a shift in market sentiment and the beginning of a new trend.

Bank Nifty closed with selling pressure, breaking below the previous consolidation level. The Relative Strength Index (RSI) is in a bearish crossover, indicating a negative sentiment. The support level is placed at 43,500; a fall below 43500 may trigger further correction in the Bank Nifty. Resistance levels are situated at 43,700 and 44,000, where call writers are waiting with their positions.

The Nifty opened on a weak note and witnessed volatile price action during the day. The Nifty ultimately closed in the red down ~60 points for the day. On the daily charts, we can observe that the Nifty has been trading in the range of 18400 – 18000 for the past couple of weeks. The pullback that it witnessed after taking support at the 20-day moving average fizzled out around the 18400 mark because the momentum indicator still has a negative crossover. Thus, price and momentum indicators are currently not in sync with each other which can lead to a consolidation in the near term.

Overall, we still believe that the Nifty is in a consolidation mode and the range of consolidation is likely to be 18000 – 18400. In terms of levels, 18420 – 18450 shall act as the immediate hurdle while 18200 – 18150 is the crucial support zone to watch out for on the downside.

The Indian rupee headed higher for a second day amid stronger Chinese Yuan and corporate dollar inflows. The exporters’ dollar selling in anticipation of the central bank’s intervention near the psychological level of 83 also added strength to the local unit.

In the last three days, spot USDINR has failed to cross the level of 82.85 amid multiple top resistance placed between 82.85 to 82.95. However, the trend for USDINR remains bullish and short-term profit booking could be an opportunity for importers to hedge their commitment.

The domestic market experienced a short-lived rally that was overshadowed by subdued global market sentiment. US Treasury yields rose due to concerns over stalled US debt ceiling talks and hawkish comments from US Fed officials, which reduced the chances of a rate pause. European markets also declined, triggered by higher-than-expected UK inflation figures that bet on more rate hikes by the BoE.

Indian rupee ended 13 paise higher at 82.67 per dollar against previous close of 82.80.

Benchmark indices ended lower in the volatile session on May 24.

At close, the Sensex was down 208.01 points or 0.34 percentat 61,773.78, and the Nifty was down 62.60 points or 0.34percentat 18,285.40. About 1,643 shares advanced, 1,727 shares declined, and 125 shares were unchanged.

Adani Enterprises, Adani Ports, Tata Motors, HDFC Bank and ICICI Bank were among the biggest losers on the Nifty. However, gainers included Sun Pharma, Dr Reddy's Laboratories, ITC, IndusInd Bank and Hero MotoCorp.

Among sectors, the metal index shed 1 percent, Bank down 0.5 percent, while the pharma index added 1 percent and the power index up 0.6 percent.

The BSE midcap and smallcap indices ended on a flat note.

-Buy rating, target at Rs 2,900 per share
-Management said FY24 10-12 percent order flow & 12-15 percent revenue growth guidance is achievable
-Government focus on capex continues, guidance factors some ordering slowdown from November
-Confidence in 40-50 bps margin improvement YoY
-Believe company should benefit from execution & margin recovery

Larsen & Toubro was quoting at Rs 2,185, down Rs 12.15, or 0.55 percent on the BSE.