Closing Bell: Nifty around 18,650, Sensex falls 260 pts; mid, smallcaps down 1% each

Taking Stock: Fall continues on 2nd day; Nifty around 18,650, Sensex down 260 points

The BSE midcap and smallcap indices shed over a percent each.... Read More

The Nifty has shown weakness recently, as it has experienced a decline for two consecutive days. On a smaller time frame, the index slipped further. Additionally, the Relative Strength Index (RSI) indicates negative divergence, indicating a weakening bullish momentum.

Looking at the support levels, there is visible support at 18500, and if the index breaks below this level, it could potentially drop towards 18200. On the other hand, there is resistance at 18800 on the higher end of the index.

The Bank Nifty index witnessed an ongoing battle between the bulls and bears throughout the week. The index faces resistance at the 44000 level, where the highest open interest is built up on the call side. On the other hand, support is observed at the 43500PE level, where put writers are active. A break on either side of this range is likely to result in a directional move for the index. However, the overall sentiment remains bearish as long as the index stays below the 44000 level.

Nervousness continued to grip the markets as the US Fed indicating two more rate hikes this year raised concerns over the slackening global economic growth. In addition, mounting fears over China's growth prospects and falling crude oil demand are the negative catalysts prompting investors to go risk-off in equities. Sharp selling in metals, oil & gas and power stocks dragged Sensex below the 63k-mark after having hit a fresh high during the week. Technically, on intraday and daily charts, the Nifty has formed a double top formation and also formed a bearish candle on weekly charts which is broadly negative.

For traders the 20 day SMA (Simple Moving Average) or 18650 would act as a sacrosanct support level. If the index trades above the same then it could retest the level of 18880 and move up to 19000. Below the 20-day SMA or 18650, the market could slip till 18500-18450.

The Bank Nifty has formed a lower top formation and is currently trading near the 50-day SMA. For Bank Nifty traders, a 50-day SMA or 43500 would act as a key support level, above which a quick pullback rally till 20-day SMA or 44000-44300 is possible. On the other side, below 50-day SMA or 43500 it could slip till 43300-43000.

Markets remained volatile for yet another session and lost over half a percent amid mixed cues. After the initial downtick, the Nifty oscillated in a narrow band and finally settled around the day’s low to close at 18,665.50 levels. The decline was widespread wherein metal, energy and auto were among the top losers. In line with the move, the broader indices too witnessed a dip and shed over a percent each.

Weak global cues are largely weighing on the sentiment and prompting profit taking across markets including ours. A decisive close below 18,600 in Nifty and 43,400 in the banking index may change the tone and trigger further slide. Participants should plan their trades accordingly.

Nifty fell for the second consecutive session on June 23 pulled lower by negative global cues. At close, Nifty was down 0.56% or 105.8 points at 18665.5. Broad market indices fell more than the Nifty even as the advance decline ratio fell further to 0.38:1.

Global stocks fell on Friday, extending their declines for the week and edging towards their worst week since March, as traders worried that central banks’ efforts to curb sticky inflation will lead to recessions and strengthen the US dollar.

Nifty formed a bearish Dark Cloud Cover pattern on weekly charts after falling 0.85% over the week. A quick recovery and move beyond the all time high may be difficult in the near term. Nifty could find support in the 18459-18555 band while 18795 could offer resistance on upmoves in the near term.

Rupee traded in a narrow range and volatility remained even after the Fed Chairman's testimony. Fed Chairman mentioned that concerns over inflation remain and that led to strength in the dollar. Euro and pound fell sharply after preliminary manufacturing PMI came in below estimates.

Today focus will be on the preliminary manufacturing PMI number from the US. We expect the USDINR(Spot) to trade sideways and quote in the range of 81.80 and 82.50.

Global central banks are currently focused on addressing inflation and have reiterated their commitment to reaching their target levels, as evidenced by the hawkish commentary from Powell and the unexpected rate hike by the Bank of England. The downward revision of earnings guidance by a major US tech company Accenture has raised concerns about potential earnings downgrades in the Indian IT sector, resulting in pressure on IT stocks. However, the domestic market is not expected to experience a significant correction due to favourable domestic economic indicators and correction in international commodities prices to sustain earnings growth on a QoQ basis.

Indian rupee in line with other Asian currencies fell against the dollar after Fed Chair Jerome Powell signalled Thursday the FOMC may tighten by two more times this year. The dollar index, a basket of six currencies, is set to snap a run of three consecutive weekly declines.

In the near-term, spot USDINR is expected to trade between 82.25 to 81.70.

Indian rupee closed lower at 82.03 per dollar against previous close of 81.95.

: Benchmark indices ended lower for the second consecutive session on June 23 with Nifty around 18,650.

At close, the Sensex was down 259.52 points or 0.41% at 62,979.37, and the Nifty was down 105.80 points or 0.56% at 18,665.50. About 1147 shares advanced, 2228 shares declined, and 138 shares unchanged.

Biggest losers on the Nifty were Adani Enterprises, Adani Ports, BPCL, Hindalco Industries and Divis Labs, while gainers included IndusInd Bank, Dr Reddy's Laboratories, Bharti Airtel, Asian Paints and NTPC.

Among sectors, metal, oil & gas, power, capital goods, auto, information technology and PSU Bank down 1-2 percent, while realty and FMCG down 0.6 percent each.

The BSE midcap and smallcap indices shed over a percent each.

IndusInd Bank tops Nifty50 list, needs to exceed recent swing high for momentum

IndusInd Bank stock price has experienced a recovery following a retest of the breakout level of horizontal trendline support. The stock recently broke out and climbed above its previous high, generating upward momentum... Read More

-Overweight rating, target at Rs 5,400 per share
-Company remains a preferred pick due to likely bottoming of 2W & 3W exports
-Prefer company due to domestic 2W recovery, EV volume ramp up
-Company is a preferred pick on improving margin due to better mix
-Launch of Bajaj triumph premium motorcycles an important catalyst