The Indian equity benchmark erased the day’s gains to ended lower in yet another volatile session on May 24, amid mixed global cues and selling across sectors.
At close, the Sensex was down 236 points, or 0.43 percent, at 54,052.61, and the Nifty was down 89.50 points, or 0.55 percent, at 16,125.20.
The market opened flat with a positive bias but swung between gains and losses throughout the session, closing near the day's low. The Sensex traded in the range of 54,524.37-53,886.28, while the Nifty moved in the 16,262.80-16,078.60 range.
"Anxiety of slowing economy and rising interest rates underpinned by soaring inflation continued to haunt the global market," said Vinod Nair, Head of Research at Geojit Financial Services.
The UK and Eurozone composite PMI registered the slowest rise in business activity in May, worsening global investor risk sentiment, he said.
On the domestic front, while all major sectors succumbed to the pressure, the auto sector bucked the trend, gaining on fuel-price cut and rise in steel custom duty, he added.
Dr Reddy’s Labs, Kotak Mahindra Bank, HDFC, Nestle India and HDFC Bank were among the top Nifty gainers, while losers included Divi’s Labs, Tech Mahindra, Grasim Industries, Hindalco Industries and HUL.
Among sectors, Nifty IT, pharma, metal, FMCG shed a percent each, while the energy index fell 0.87 percent.
Stocks and sectors
On the BSE, information technology, healthcare, metal, FMCG, power and realty indices were down a percent each. The bank index, however, gained marginally.
Broader indices underperformed the benchmarks, with the BSE midcap index falling 0.85 percent and smallcap index down 1.1 percent.
A long build-up was seen in Coromandel International, Ashok Leyland and Abbott India, while a short build-up was witnessed in PVR, Divi’s Laboratories and Balrampur Chini Mills.
Amara Raja Batteries, CSB Bank, Divi's Laboratories, Equitas Small Finance Bank, D. Lal PathLabs, HDFC Asset Management Company and Tata Steel were among the stocks that touched their 52-week low on the BSE.
Among individual stocks, a volume spike of more than 300 percent was seen in Punjab National Bank, Balrampur Chini Mills and BHEL.
Outlook for May 25
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
The cautious optimism seen in early trade failed to generate healthy gains as weakness in Asian peers and pessimism in European gauges triggered last-hour selling.
Investors are waiting for the minutes of the US FOMC meeting, which will offer cues on the central bank's rate-hike direction.
There is a lot of skepticism among investors about interest rate hikes in the near term and their impact on growth.
On the daily chart, the Nifty has formed a bearish candle, which indicates further weakness.
As long as the index trades below 16,250, the correction wave is likely to continue. A slip could see the index retest 16,000-15,050. On the flip side, post-16,250 breakout, the index could move to 16,325-16,375.
Rupak De, Senior Technical Analyst, LKP Securities
The Nifty remained directionless during the day leading to volatility in the market. On the higher end, resistance will be at 16,400 over the near term. Support on the lower end remains at 16,000-16,020.
Volatility may continue over the near term. Any decisive breakout above 16,400 may induce a strong directional move in the market.
Ajit Mishra, VP-Research, Religare Broking
Markets traded volatile and lost over half a percent in line with the prevailing consolidation phase. After the flat start, the benchmark hovered in a range for most of the session and settled closer to the day’s low.
A mixed trend across sectors kept the participants busy, wherein IT, metal and realty were among the top losers. The broader markets underperformed as both midcap and smallcap ended 0.9 percent and 1 percent lower.
Indications favour further consolidation, so participants should have a stock-specific trading approach. In the absence of any major events, global cues, earnings and upcoming derivatives expiry will be in focus.
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