Closing Bell: Market ends flat amid volatility; IT gains, metals drag

Taking Stock: Market bounces back; Nifty holds 19,400, Sensex gains

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Markets started the week on a volatile note and ended almost unchanged. After the initial fall, Nifty recovered gradually as the day progressed and finally settled at 19426.30 levels. Meanwhile, a mixed trend was witnessed on the sectoral front wherein IT, FMCG and media edged higher while metal, realty and financials ended in the red.

Nifty respected the support zone of the short term moving average i.e. 50 EMA, after penetrating the previous swing low at 19,300 levels. Despite the corrective tone, we have been seeing resilience in select heavyweights, which is not only keeping a check on the pace of decline and also triggering recovery in between. We feel it is prudent to stay focused on trade management amid mixed signals and wait for clarity.

Following weak performances in Asian markets, the domestic indices commenced the day with a negative bias, prompted by discouraging domestic industrial data along with concerns over demand from China. However, the indices managed to recover from their initial losses, ending the day on a relatively neutral note.

India's wholesale inflation persisted in negative territory, albeit moderating to -1.36%, as the decline in fuel prices was counterbalanced by higher food costs. India's CPI inflation, due to be released today, is anticipated to exceed the RBI's tolerance level of 6% due to mounting pressure from elevated food prices.

The Nifty index displayed volatility throughout the trading session, before ending the day with minimal change. On the daily chart, it's evident that the index received support at the 50EMA, leading to a notable intraday rebound. However, the RSI on the daily chart demonstrated a bearish crossover, with its value dropping below 50. This could be indicative of a weakening trend. If the index falls below the 19250 mark, it might incite a corrective movement towards the 19100-19150 range in the near future. Conversely, resistance can be identified at the 19550 level on the higher side.

The Nifty witnessed a volatile day of trade today. It opened on a negative note and witnessed selling pressure. However, as the day progressed it saw buying interest from lower levels and closed well off the intraday lows. More importantly, it has managed to close above the 40-day moving average (19355), indicating that it is a crucial support to watch out for in the near term. Only a decisive close below it shall lead to a further decline. On the upside, the zone of 19450 – 19500 is a crucial hurdle where resistance in the form of the key hourly moving averages is placed which shall restrict the upside.

The daily and hourly momentum indicators are providing divergent signals. Thus, under such a situation a consolidation is highly likely. Overall, there a no signs of a trend reversal, and hence the short-term outlook is negative. On the downside we expect the Nifty to target levels of 19100. The crucial support zone on the downside is placed at 19300 – 19250 and on the upside, resistance is placed at 19450 – 19500.

Bank Nifty has formed a doji pattern on the daily charts. this pattern after a sharp fall indicates that Bank Nifty can consolidate from a short-term perspective. After falling for three consecutive weeks, it has reached the 20-week moving average (43880) which can restrict a sharp decline from hereon. The daily and hourly momentum indicators are providing divergent signals. Thus, under such a situation a consolidation is highly likely. However, the overall trend is still negative, and we expect levels of 43500 from a short-term perspective.

Markets continued to witness wild fluctuations due to weak Asian cues but early optimism in European indices aided recovery in local markets with the help of buoyancy in IT stocks. However, deflation and demand slowdown in China coupled with concerns over more rate hikes in developed economies going ahead has been taking the sheen out of equity markets. Investors are also wary of steady selling by foreign investors in local markets this month, which is causing traders to limit their exposure. All eyes will be on CPI and WPI inflation numbers and if the reading is higher, more correction could be in the offing.

Technically, after an early morning selloff the Nifty took support near the 50 day SMA (Simple Moving Average) and bounced back sharply towards the end. For the day traders now, 19350 would act as a trend decider level, above which the pullback rally could be seen which would drive the market up till 19500-19560. On the flip side, a fresh selloff could be seen only after the dismissal of 19350, and below the same, the index could retest the level of 19300-19250 or 50 day SMA.

Indian rupee ended lower at 82.95 per dollar on Monday versus Friday's close of 82.85.

: Benchmark indices ended flat in the volatile session on August 14.

At close, the Sensex was up 79.27 points or 0.12 percent at 65,401.92, and the Nifty was up 6.20 points or 0.03 percent at 19,434.50. About 1509 shares advanced, 2101 shares declined, and 165 shares unchanged.

LTIMindtree, Divis Labs, Infosys, HUL and Reliance Industries are among the major gainers on the Nifty, while losers included Adani Enterprises, JSW Steel, Hindalco Industries, State Bank of India and Tata Steel.

On the sectoral front, except Information Technology and FMCG, all other indices are ended on a negative note with metal index down nearly 2 percent, while power, realty and PSU Bank down 0.5 percent each.

BSE midcap and smallcap indices shed 0.5 percent each.

-Hold call, target raised to Rs 230 from Rs 200 per share
-Expect resolution of Mundra next year, renewables to benefit from recent capitalisation
-Upgrade as believe stock is factoring in benefit of renewables valuation

-Overweight call, target Rs 450 per share
-Balance sheet & RoCE continues to strengthen
-Q1 RoCE has met upper end of FY26 target of 12-15 percent
-Net debt reduced to Rs 3,800 crore from Rs 4,300 crore in Q4
-Capex guidance remains unchanged with key focus on debottlenecking
-Use of AI/Ml to further increase utilization levels
-Near term outlook in Europe market appears subdued, co expects recovery in H2

-Outperform call, target Rs 4,400 per share
-Reported earnings came in 21 percent ahead of expectation
-Strong double-digit margin across all segments
-Robust order inflow, aided by a mix of base and project orders
-Sustained demand momentum; scale benefits to aid margin
-Rs 2,000 crore set aside for bolt-on acquisitions showcases growth focus
-Believe it can help accelerate its portfolio in newer growth areas

Indian Rupee fell to a fresh 10-month low on weak domestic markets and a strong Dollar. India’s IIP also grew at a slower pace as compared to the forecast.
The dollar gained after US PPI data was higher than forecast and safe haven demand on risk aversion in global markets.

We expect Rupee to trade with a negative bias on risk aversion in global markets and rising US dollars. FII outflows may also weigh on Rupee. However, a decline in crude oil prices may support Rupee at lower levels. Traders may take cues from India’s inflation data which is expected to jump to 6.4% from 4.81% in the previous month. We expect the USDINR spot to trade in the range of 82.50 to 83.50 in the near term.

The Sensex was up 156.17 points or 0.24 percent at 65,478.82, and the Nifty was up 22.50 points or 0.12 percent at 19,450.80. About 1340 shares advanced, 1917 shares declined, and 121 shares unchanged.