Closing Bell: Indices close marginally lower; Dr Reddy's, L&T, Hindalco, Divi's Lab top losers

Weak Asian cues dampened the sentiment as local markets remained subdued throughout the trading session before finally edging marginally lower amid selling in metal and capital goods stocks. Investors are probably in a wait-and-watch mode after a sharp spike in recent sessions. Technically, the short term uptrend formation is still positive and the index is consistently forming a higher bottom formation which is also supportive for the bulls. We are of the view that as long as the index is trading above 18200, the uptrend formation Is likely to continue. Above which, the index could move up till 18400-18475. On the flip side, below 18200, the market could slip till 18125-18100.

Indian equities ended slightly lower amid weak global cues. Nifty was down 0.1 percent. Broader markets however ended higher as Nifty Mid Cap and Nifty Small Cap were up 0.3 percent and 0.5 percent, respectively. The majority of sectoral indices ended in the green. Nifty Consumer Durables (+0.9 percent), Nifty FMCG (+0.5 percent) and Nifty Realty (+0.5 percent) were the major gainers. Nifty Pharma (-1.3 percent) and Nifty Healthcare (-1.1 percent) were the primary laggards.

The U.S. stocks rose as US inflation data came in line with estimates. The tech-heavy Nasdaq Composite added 1 percent, closing at its highest level since June. The blue-chip S&P 500 finished 0.4 percent higher in a choppy day of trading. The Dow ended mildly in the red. The yield on the 10-year note dropped 0.07 percentage points to 3.44 percent after the inflation data. Data from the US Bureau of Labor Statistics showed the US CPI for April eased to 4.9 percent in April, the lowest annual reading since April 2021. The CPI rose 0.4 percent M-o-M in April, up from 0.1 percent in March. Core inflation, which excludes volatile food and energy costs, dipped slightly in April to 5.5 percent YoY.

The markets will keep one eye on the quarterly results & the management commentary while also focusing on the US regional banking crisis, US government debt concerns, inflation and crude oil prices. Inflation in the US is cooling with the Fed’s monetary tightening taking effect. Indian bond yields have corrected by ~50bps from their peak to 7.02 percent lowering the borrowing cost for government and corporates. A steep correction in Brent crude prices is an additional tailwind for the Indian economy.

The current market rally has been largely influenced by consistent FII inflows, driven by lower treasury yields and the weakness of the US Dollar. However, the gains in the domestic market were tempered by weak earnings reported by a few heavyweight companies. On the global front, markets remained positive as US inflation eased below 5 percent, providing reassurance to investors that the Fed's rate hike measures have been effective in managing inflation levels.

Markets remained range bound on the weekly expiry day and settled almost unchanged. After the initial uptick, the Nifty oscillated in a narrow band and finally closed at 18,297 levels. The majority of sectors traded in sync with the benchmark and ended flat however selective buying in banking, financials and FMCG kept the traders busy. Meanwhile, the market breadth was inclined on the advancing side, thanks to buying in the smallcap space.

Markets have been maintaining a positive tone but a mixed trend across index majors is capping the momentum. We thus reiterate our view to focus on stock selection and trade management. In the absence of any major event, the performance of the global markets and earnings will remain in focus for cues.

Indices in India traded sideway throughout the day with high volatility, closing very close to 18300. The markets has been successfully closing above 18200 for the fourth day and hence for short term traders 18200 will act as a strong base. The Bullish momentum will continue until and unless 18200 is not breached on the lower side and hence buy on dips can be the strategy with closing SL at 18200.

The market has traded flat to negative with the Sensex loosing 0.06 percent and closed at 61904.52 and Nifty was Negative by 0.10 percent intraday and closed at 18297.00 levels whereas Bank Nifty was up by 0.33 percent and settled at 43475.30.

INDIA VIX was up by 0.99 percent intraday and settled at 13.21.

Volume profile indicates Index has a strong support around 18100-18200 zone. Coming to the OI Data, on the call side, the highest OI observed at 18500 followed by 18600 strike prices while on the put side, the highest OI is at 18200 strike price. On the other hand, Bank nifty has support at 42900-43100 while resistance is placed at 43700-43900 range.

The Indian rupee ended at 82.09 against US dollar, down 0.12 percentfrom the previous close of 81.99. The 10-year bond yield was trading at 7.022 percent, down 2 bps from its previous close of 7.037 percent. Both bond yield and prices move in opposite directions.

TheSensexwas down 35.68 points or 0.06 percent at 61,0-5/52, and the Nifty was down 18.10 points or 0.10 percent at 18,297. About 2,052 shares advanced, 1,427 shares declined, and 153 shares were unchanged.

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