The benchmark indices ended on a positive note in a volatile session on August 23 led by IT names. At close, the Sensex was up 226.47 points, or 0.41 percent, at 55,555.79, and the Nifty was up 46 points, or 0.28 percent, at 16,496.50.
"The market witnessed trading in fine fettle with the Nifty crossing 16,500 levels in the afternoon session. It is going to be crucial for the short-term market scenario to sustain above the 16,500 level," said Ashis Biswas, Head of Technical Research at CapitalVia Global Research.
If the market sustains at the 16,500 level, it can move towards 16,700 as the momentum indicators like the RSI and MACD stay positive and market breadth improves, further strengthening a short-term bullish outlook, he added.
HCL Technologies, Nestle, TCS, Bajaj Finserv and Bharti Airtel were the top Nifty gainers. Grasim Industries, Adani Ports, M&M, Eicher Motors and Bajaj Auto were among the top losers.
On the broader indices front, the BSE midcap index fell 0.90 percent and the smallcap index shed 1.5 percent.
Among sectors, the Nifty IT index gained 1.7 percent each, while metal, auto and PSU bank indices lost 0.5-1.5 percent.
Stocks & sectors
On the BSE, the IT index added over a percent and oil & gas index rose 0.5 percent. However, auto, capital goods, healthcare, metal and realty indices fell 0.5-1 percent.
Among individual stocks, a volume spike of more than 300 percent was seen in Cadila Healthcare, SAIL and Escorts.
A long buildup was seen in Mphasis, Mindtree and Havells, while a short buildup was seen in SAIL, Tata Chemicals and Torrent Power.
More than 150 stocks, including Nestle, Titan Company and HUL, hit a 52-week high on the BSE.
Technical View
The Nifty formed a bearish candle as it closed lower than its opening levels.
"It has to continue to hold above 16,450-16,500 zones to extend the move towards 16,600 and 16,700 zones, while on the downside, support is seen at 16,380 and 16,300 levels," said Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services.
Outlook for August 24
S Ranganathan, Head of Research at LKP Securities
Despite the narrative on earnings being positive, the broader markets witnessed profit-booking and many HNIs looking for listing gains have been caught on the wrong foot in the recent primary market offerings.
As indices rule firm on the back of IT stocks, several midcap names across sectors were seen wilting under selling pressure in late afternoon trade with the QSR basket, too, meeting with profit booking.
Vinod Nair, Head of Research, Geojit Financial Services
Heavy selling continued in small and mid-cap stocks, while headline indices traded positive due to strong support from IT stock and positive global peers. The key factor for the correction is the good performance during 2020-21 leading to peak valuations, while liquidity is expected to normalise in the future.
The ongoing correction will provide an opportunity for long-term investors to re-enter quality stocks.
Rahul Sharma, Co-Founder, Equity99
The market is expected to remain volatile with weakness seen in midcaps and smallcaps. Investors are advised to remain cautious.
On the technical front, 16,450 will act as crucial support for the Nifty on braking which we might see 16,400- 16,375. On the upper side, 16,560 will act as resistance. Once the levels is crossed, we may see 16,610 to 16,650 levels.
The Bank Nifty is underperforming the broader markets; 34,900 acts as strong support, a breaking of which can see the index slide to 34,750-34,600. On the upper side, 35,400 is strong resistance on breaking which we might see 35,650 levels.
IT, FMCG, banks and consumer staples will be the sectors in focus on August 24.
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