Closing Bell: Nifty ends below 18,200, Sensex falls 151 pts; PSU Banks outshine

Profit booking seemed to be the order of the day, especially in the 2nd half of day's session as both Sensex and Nifty ended lower after a positive start.

Investors seemed nervous ahead of US CPI inflation numbers that are slated to release on Thursday. Technically speaking, the line in the sand is at Nifty’s support at 17907 mark, with the immediate goal post seen at its all-time-high at 18605 mark.

The positive developments among the global peers have led to a sturdy start to our market post the mid-week holiday. The benchmark index started with a small gap-up opening, but the follow-up buying was certainly lacking, resulting in a gradual fall throughout the session. Meanwhile, the banking index hastened to register a new high of 41,948.90. With such an action-packed day, Nifty snapped its two days of winning streak and settled a tad above 18150 with a mere loss of 0.25 percent.

We remain sanguine about the technical setup of the Nifty, as the index is in a cycle of higher highs – higher lows and is currently hovering well above the moving averages on a daily time frame. At the same time, we would advocate not being complacent, as tentativeness could be sensed at higher levels, post the recent rally. However, the undertone is in favor of bulls till Nifty sustains above the 18000 mark, but the next couple of trading sessions would be crucial to watch for the near-term trend.

On the technical front, the sacrosanct support lies at the 18000 mark, and till the time it is firmly defended, there should not be any sign of worrying. While on the flip side, the 18250-18350 zone is likely to be seen as stiff resistance for the index.

Amidst the volatility, the undertone is likely to remain upbeat, and we reiterate to keep a close tab on the mentioned levels. Also, one should continue with the stock-specific approach, as even though the indices may be doing little, the individual stocks are not at all short of action. Hence one should continue to identify such potential movers and trade accordingly.

Indian benchmark indices made a gap up opening and closed in red in highly volatile session. Nifty50 closed at 18157 (-0.25%) and Sensex closed at 61033 (-0.25%). Among sectors Selling was visible in IT, Pharma, reality, Capital goods whereas Nifty PSU Banks & FMCG closed in green.

Indian markets are following the trend of global sentiments which are waiting for the outcome of US elections.

On the technical front, the key resistance levels for Nifty50 are 18250 and on the downside 17900 can act as strong support. Key resistance and support levels for Bank Nifty are 41950 and 41200 respectively

For the last couple of sessions, the Nifty is attempting to cross the level of 18200, however it is unable to sustain in the higher territory. The recent higher high in the index on daily chart is not accompanied by higher high in the daily & the hourly momentum indicators. This is a sign of exhaustion in momentum on the upside.

The Nifty is currently trading near the key hourly moving averages, which are near 18100. If that is breached then the index can slide towards 18000, which will be the make or break level for the index from short term perspective.

Indian Nifty remained volatile with a predominant bearishness on Wednesday's trading. On the higher end, the headline index has found resistance around 18300. The overall trend is expected to remain volatile as long as it remains below 18300.

A decisive move above 18300 may induce a rally towards 18600. However, failure to move beyond 18300 may trigger further profit taking. On the lower end, support is pegged at 18000; below which the index may extend its loss towards 17700.

Markets remained volatile and ended marginally lower, in absence of any major trigger. After the initial uptick, the Nifty index inched gradually lower as the session progressed and finally settled at 18,157 levels.

The majority of sectors traded in line with the benchmark and ended flat to marginally lower. Meanwhile, the broader indices underperformed and lost over half a percent each.

The recent market move indicates caution among the participants amid mixed signals from the global front. However, rotational buying across sectors is helping the index to maintain a positive tone. Amid all, we feel the prudent approach is to look for stock-specific opportunities for trading until Nifty regains momentum.

Continued FII inflows, combined with a consolidation in the dollar index, boosted market sentiment. A major next trigger could be the US CPI inflation, to be announced tomorrow, consensus indicate a moderation to 7.9% in October compared to 8.2% in Sept. A fast slowdown in inflation would provide the fuel for the market to edge higher, the key problem of 2022.

Despite a 4.5% rise in the PSU Bank Index last session, there was no let up as today the index led from the front with another stellar performance of almost 4% rise as the street gave a thumbs up to the second quarter earnings of PSU Banks.

All eyes are now on the Inflation data expected this week as supply side issues coupled with domestic demand would play a part given the way retail fuel prices have been behaving.

PSU banks were trading at an inexpensive valuation for a long time. The lower growth capital and legacy NPAs were the reason for underperformance.

However, the concern of asset quality and growth are way behind. The large public banks have delivered strong growth and improvement in credit quality. Therefore, PSU banks are likely to perform well in mid-run. Bank of Baroda, Canara Bank are top picks in PSU space.

Indian rupee closed 46 paise higher at 81.45 per dollar on Wednesday against Monday's close of 81.91.

In the highly volatile session the Indian benchmark indices ended lower with Nifty below 18200.

At Close, the Sensex was down 151.60 points or 0.25% at 61,033.55, and the Nifty was down 45.80 points or 0.25% at 18,157. About 1669 shares have advanced, 1745 shares declined, and 108 shares are unchanged.

Hindalco Industries, Power Grid Corp, Divis Labs, Tech Mahindra and Grasim Industries were among the top Nifty losers, while gainers were Adani Ports, Coal India, ITC, Dr Reddy’s Labs and Hero MotoCorp.

Among sectors, except PSU Bank and FMCG, all other indices ended in the red.

The BSE midcap index shed 0.5 percent and smallcap index down 0.3 percent.

APL Apollo Tubes has posted 2.8 percent jump in its Q2FY23 net profit at Rs 150.2 crore versus Rs 146.1 crore and revenue was up 28.7% at Rs 3,969.2 crore versus Rs 3,084 crore, YoY.

APL Apollo Tubes was quoting at Rs 1,044.95, down Rs 51.10, or 4.66 percent.

-Overweight call, target at Rs 1,101 per share
-Q2 weak, but in-line with expectations
-See early signs of improvement in performance
-Expect gains in growth to be visible in FY24
-Guidance for FY23 maintained, reported CNBC-TV18.

Godrej Consumer Products was quoting at Rs 815.95, down Rs 10.20, or 1.23 percent.