On yet another day of volatile trade, Indian shares took a tumble on October 6 amid weak global cues after the International Monetary Fund (IMF) said that growth in 2021 would likely fall short of its July forecast of 6 percent.
At close, the Sensex was down 555.15 points, or 0.93 percent, at 59,189.73 and the Nifty was down 176.30 points, or 0.99 percent, at 17,646.
IMF chief Kristalina Georgieva said on October 5 that it expects global economic growth in 2021 to fall slightly below its July forecast of 6 percent, citing risks associated with debt, inflation and divergent economic trends in the wake of the COVID-19 pandemic.
Hindalco Industries, SBI Life Insurance, IndusInd Bank, JSW Steel and Tata Steel were among the major losers on the Nifty. Tata Consumer Products, ONGC, UPL, Britannia Industries and HDFC Bank were among the big gainers.
BSE midcap and smallcap indices fell 0.5-1.2 percent.
All sectoral indices ended in the red, with Nifty IT, metal, pharma, auto, and PSU bank falling 1-3 percent.
Stocks & sectors
On the BSE, the metal index shed 3 percent, while auto, healthcare, IT and realty indices fell over a percent each.
Among individual stocks, a volume spike of more than 400 percent was seen in Bosch, Marico and City Union Bank.
Long buildup was seen in Bosch, ONGC and Marico, while short buildup was seen in Crompton Greaves Consumer Electrical, Oberoi Realty and Ipca Laboratories.
More than 250 stocks, including Bosch, IOC, Tata Elxsi, Marico and Coal India, hit a 52-week high on the BSE.
Technical View
The Nifty formed a bearish engulfing candle on the daily scale, threatening the short-term trend with sustained supply at higher zones.
"Now, it has to cross and hold above 17,700 for an up move towards 17,777 and 17,900 levels, whereas on the downside, support is seen at 17,580 and 17,450 zones," said Chandan Taparia, Vice President, Analyst-Derivatives, Motilal Oswal Financial Services.
Outlook for October 7
Rohit Singre, Senior Technical Analyst, LKP Securities
The Nifty was under pressure from the start of the day and closed a percent down to form a bearish candle after two consecutive bullish candles.
The index has decisively breached the majority support zone. Now the immediate support zone is near 17,600-17,500 and if the index manages to hold above it, a swift pullback can be expected. Now resistance is near the 17,700-17,770 zone, where we may see some profit-taking.
Sahaj Agrawal, Head, Research-Derivatives, Kotak Securities
The Nifty50 continues to be in a medium-term uptrend—we expect 18,500 to be conquered going ahead.
For the short term, data parameters suggest positive bias. Immediate support for the index is at 17,640, while resistance is expected at 18,000 and18,200. Buying on dips is advisable.
Metals are showing early signs of reversal, while the NBFC space is expected to remain in action. Midcap stocks are expected to continue to outperform.
Sachin Gupta, AVP, Research, Choice Broking
Technically, on the daily chart, the index has formed a bearish engulfing candlestick pattern, which suggests weakness for the coming day.
Moreover, a momentum indicator Stochastic witnessed a negative crossover. In addition, on a four hourly chart the index has sustained below Middle Bollinger Band formation, which indicates further correction but the overall trend is still looking bullish, so every dip would be a buying opportunity for the fresh entry.
At present, the index has immediate support at 17,500, while resistance is at 17,800.
Rahul Sharma, Co-Founder, Equity99
Profit-booking was seen in Indian markets along with weak global clues with Dow Futures down 340 points. Investors are advised to keep strict stop loss to positions and avoid any fresh buying at current levels.
The Nifty witnessed a sharp decline in the second half of the session. On hourly charts, we can see a reversal that crossed 89 WMA & 50 DEMA but has taken support by its 100 DEMA.
Support is placed at 17,595 followed by 17,490 and 17,375. Similarly on the upside, 17,750 will act as immediate hurdle and cross-over will again test 17,850-17,900 levels.
The Bank Nifty, which was much stable than the main index but showed a similar signal, the second half of the session was filled with supply. Support for Bank Nifty is placed at 37,300-37,100-36,900 and resistance is placed at 37,800 - 38,100 levels.
Selling is visible on higher levels for both indices. Chemicals, textiles, banks and logistics will be in focus on October 7.
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