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Taking Stock | Market extends losses for the third day; IT, metal, realty a drag

Volatility will rise on the monthly expiry day. Riding against the trend may not be beneficial for short-term traders, say experts.

May 25, 2022 / 04:33 PM IST

The Indian equity benchmark ended lower for the third consecutive day on May 25, pulled down by a selloff in information technology, metal and realty names.

At close, the Sensex was down 303.35 points, or 0.56 percent, at 53,749.26, and the Nifty was down 99.40 points, or 0.62 percent, at 16,025.80.

After a positive start, the market traded in the green in the first half but, as has been the trend for the past many sessions, it erased all the gain in the second half to close near the day's low.

"Domestic indices wavered tracking mixed sentiments from the global markets as investors assessed the possibility of a recession in the US followed by the Fed policy tightening," said Vinod Nair, Head of Research at Geojit Financial Services.

Global markets are awaiting the release of the Fed minutes, which will be evaluated for details on the path of the upcoming rate hikes. In this whipsaw market, investors can resort to defensives and value stocks and sectors, he said.

Close

Asian Paints, Adani Ports, Divi’s Labs, UPL and TCS were among the top Nifty losers, while gainers included NTPC, HDFC Life, SBI Life Insurance, HDFC and Bharti Airtel.

On the sectoral front, auto, metal, IT and pharma indices fell 1-3 percent. The Nifty Bank ended with marginal gains.

Stocks and sectors

IndexPricesChangeChange%
Sensex53,005.15-156.13 -0.29%
Nifty 5015,793.55-38.50 -0.24%
Nifty Bank33,305.25-506.00 -1.50%
Nifty 50 15,793.55 -38.50 (-0.24%)
Wed, Jun 29, 2022
Biggest GainerPricesChangeChange%
Reliance2,560.5067.85 +2.72%
Biggest LoserPricesChangeChange%
HDFC Life547.60-10.40 -1.86%
Best SectorPricesChangeChange%
Nifty Energy24713.50235.55 +0.96%
Worst SectorPricesChangeChange%
Nifty FMCG37788.50-384.60 -1.01%

On BSE, except bank, all sectoral indices ended in the red, with oil & gas, metal, healthcare, realty, capital goods and IT down 1-3 percent.

Broader indices underperformed the benchmarks. The BSE midcap index shed 1.9 percent and smallcap index 2.9 percent.

A long build-up was seen in Container Corporation of India, Balkrishna Industries and ICICI Lombard General Insurance Company, while a short build-up was witnessed in Chambal Fertilisers and Chemicals, Granules India and Delta Corp.

Dr Lal PathLabs, JSW Steel, Bank Of Maharashtra, Lupin, Glenmark Pharmaceuticals, Divi's Laboratories, Crompton Greaves Consumer Electricals and Godrej Industries were among the stocks that touched their 52-week low on the BSE.

Among individual stocks, a volume spike of more than 100 percent was seen in Delta Corp, GNFC and Metropolis Healthcare.

Outlook for May 26

Om Mehra, Research Associate, Choice Broking

Technically, the Nifty has formed three black crow patterns on the daily chart, suggesting that bearishness will remain intact.

We expect a rise in volatility as well on the monthly expiry day. Riding against the trend may not be beneficial for short-term traders.

All major moving averages are above 16,300. Indicators such as MACD and RSI are still struggling to overcome the oversold zone in the daily time frame.

The Nifty has support at 15,800, while on the upside, 16,300 may act as immediate resistance for monthly expiry.

The Bank Nifty has support at around 33,500 and resistance is at 35,200 on the daily chart.

Shrikant Chouhan, Head, Equity Research (Retail), Kotak Securities

The subdued mood in the market continued for the third straight session as investors preferred to liquidate their holdings in stocks, which are still highly valued.

Investors were also waiting for the US FOMC minutes that will provide some clarity on where the market could move in the near term.

Technically, on intraday charts, for the last three days, the Nifty has been holding the lower top formation and on the daily chart, it formed a bearish candle, which is broadly negative.

We are of the view that the short-term market structure is weak but it is in oversold territory. For traders, 16,000 will act as a sacrosanct level. If the index succeeds to trade above it, then it can move to 16,150-16,260. However, selling pressure is likely to mount below 16,000 and the index can slip to 15,900-15,850.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Rakesh Patil
first published: May 25, 2022 04:33 pm
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