After staging a smart rebound in the previous session (Friday), the market once again came under selling pressure on October 3. The Indian benchmark indices ended on a negative note with the Nifty finishing below 16,900 amid weak global cues and selling across the sectors, barring pharma.
At Close, the Sensex was down 638.11 points or 1.11% at 56,788.81, and the Nifty was down 207 points or 1.21% at 16,887.30.
"Global markets are expected to stay under pressure due to the confluence of an unfavourable economic outlook and investor risk aversion," said Vinod Nair, Head of Research at Geojit Financial Services.
"Global markets were in pain as economic data forecast to shed lower as indicated by high-frequency indicators in European regions like UK PMI is consequently down below 50 showing contraction in economy. As demand slowed, India's manufacturing PMI declined slightly to 55.1 in September. As a result, all the key sectors were pressured by selling, except pharma & Oil stocks," Nair added.
Adani Enterprises, Eicher Motors, Adani Ports, Maruti Suzuki and Tata Consumer Products were among the top losers on the Nifty. On the other hand, ONGC, Dr Reddy's Laboratories, Cipla, BPCL and Coal India were the top gainers.
Except for pharma, all other sectoral indices ended in the red with Nifty Bank, Auto, Energy, FMCG, Metal and PSU Bank down 1-3 percent.
Stocks and sectors
On BSE, FMCG, Auto and Power indices were down 2-3 percent, while Bank, Capital Goods, Information Technology and Realty and Oil & gas indices shed 1 percent each. However, the Healthcare index rose nearly 1 percent.
BSE Midcap index shed 1.2 percent and Smallcap index fell 0.54 percent.
A short build-up was seen in Dr Lal PathLabs, Eicher Motors and Ambuja Cements, while a long build-up was witnessed in Lupin, Aurobindo Pharma and Zydus Lifesciences.
On the BSE - more than 100 stocks touched their 52-week high including Cipla, DFM Foods, KRBL, Lemon Tree Hotels, Rites, RPG Life Sciences and Sun Pharmaceutical Industries.
Among individual stocks, a volume spike of more than 100 percent was seen in Eicher Motors, Crompton Greaves Consumer Electrical and Coromandel International.
Outlook for October 4
Ajit Mishra, VP - Research, Religare Broking
Markets started the week on a feeble note and lost over a percent, tracking weak global cues. After the flat start, the Nifty gradually inched lower as the session progressed and settled around the day’s low to close at 16,887 levels.
The selling pressure was widespread and all the sectoral indices, barring pharma, ended lower wherein the metal and PSU banking were among the top losers. Meanwhile, the broader indices traded mixed and settled with a cut of 0.5-1.3%.
The pressure in the global indices, especially the US, is weighing on the sentiment and we feel the scenario would continue in absence of any major domestic trigger. A decisive breakdown below 16,800 in Nifty could intensify the selling. Participants should stay light and prefer defensive viz. pharma and FMCG over others for long trades.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas:
The Nifty lacked follow-through buying on October 03, after having formed a bullish outside bar and an Engulfing bull candle on September 30.
It witnessed downside pressure throughout the day and ultimately formed an "Inside bar" pattern on the daily chart.
In terms of the Fibonacci retracement, it retraced nearly 78.6% of Friday’s rise where the key Fibonacci level acted as a support near 16,840. The weekly chart shows that the index has once again moved down to retest its key weekly moving averages.
The overall structure shows that the index has stepped into a short-term consolidation mode and can see consolidation near 16,800 - 17,200. The internal structure shows that a move towards the upper end of the range is likely in the coming sessions.
Rupak De, Senior Technical Analyst at LKP Securities:
On the daily chart, the benchmark Nifty has formed a dark cloud cover formation, suggesting a bearish reversal. Besides, the index has fallen below the 200DMA, which is again a bearish set-up. The RSI is in bearish crossover and falling towards the oversold zone.
On the lower end, the index has support at 16,800, a decisive fall below 16,800 may take the Nifty towards 16,600/16,300. On the higher end, resistance is visible at 17,000/17,200.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.