The Indian benchmark indices erased some of the previous session's gains to end lower after a volatile session on August 8, as investors turned cautious ahead of the Reserve Bank of India policy outcome and release of important data later in the week.
At close, the Sensex was down 106.98 points, or 0.16 percent, at 65,846.50, and the Nifty was down 26.50 points, or 0.14 percent, at 19,570.80.
On the back of mixed global cues, the indices opened flat and erased early gains to close with moderate losses.
The RBI's Monetary Policy Committee (MPC) began its three-day meeting today and will announce the decision on August 10, the day on which the US CPI inflation numbers for July will also be released. While the RBI is expected to hold policy rates, American prices will offer a cue to the Federal Reserve's stance, which has a bearing on global markets. The market participants will also keep an eye on India's industrial production data due on August 11.
Stocks and sectors
Adani Enterprises, Power Grid Corporation, Hindalco Industries, M&M and Divis Labs were the top Nifty losers, while gainers were Hero MotoCorp, SBI Life Insurance, Cipla, Tech Mahindra and Wipro.
The PSU bank index gained 3.3 percent and the pharma index 0.6 percent, while other sectoral indices ended flat to negative.
BSE midcap and smallcap indices ended with marginally higher.
A long build-up was seen in Biocon, Dixon Technologies and SBI Life Insurance, while a short build-up was seen in Tata Chemicals, Adani Enterprises and Power Grid.
Among individual stocks, a volume spike of more than 400 percent was seen in Piramal Enterprises, Chambal Fertilisers and Chemicals and Hero MotoCorp.
More than 250 stock touched their 52-week high on the BSE. These included Venus Pipes & Tubes, Torrent Pharmaceuticals, Shyam Metalics and Energy, Syngene International, Religare Enterprises, RailTel Corporation of India, PB Fintech, NLC India, Grasim Industries, Patel Engineering, Muthoot Finance, Lupin, L&T Technology Services, Kolte-Patil Developers, Karnataka Bank, ITD Cementation, GMR Airports Infrastructure, Genus Power Infrastructures, Dr. Reddy's Laboratories, Cipla and Cyient.
Outlook for August 9
Osho Krishan, Sr Analyst, Technical & Derivative Research, Angel One
The Nifty snapped its two-day winning streak to close 0.13 percent lower at 19,571.
There has been no significant change in the technical structure of the index, which is hovering around the 20-day simple moving average for a couple of sessions with no assertive moves.
The broader market kept the trader’s fraternity busy, while the benchmarks remained tentative. On the technical front, the resistance of the bullish gap withholds the sturdy hurdle and till it is cleared in a decisive manner, some selling pressure is likely at higher levels. On the downside, 19,500-19,440-19,380 are to be treated as immediate supports.
Traders should be fussy with stock selection. Global and domestic data are in the pipeline for the week and one needs to stay abreast of the developments, which are likely to dictate the near-term trend in the market.
Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
On the daily charts, the Nifty witnessed a counter-trend pullback in the past three trading sessions. It faced resistance around the 20-day moving average (19,645) and the 61.82% Fibonacci retracement level (19,605) of the fall from 19,795–19,296. The rise of the past three sessions is overlapping and thus the index is undergoing a complex correction and the pullback was an “X” wave pullback.
The hourly momentum indicator has a negative crossover, which is a sell signal, and with the daily momentum indicator already in the sell mode, it supports our bearish outlook on the index. Overall, we continue to maintain our negative stance on the Nifty and we expect 19,100 from a short-term perspective.
Bank Nifty could not surpass the 40-hour moving average, indicating selling pressure. It traded within the range of the penultimate trading session (44,520–45,120). Until the range is not breached, we can expect the consolidation to continue.
The daily momentum indicator has a negative crossover, again a sell signal. Thus, this pullback should be used as a selling opportunity. On the downside, we expect 44,000 from a short-term perspective.
Shrikant Chouhan, Head of Research (Retail), Kotak Securities
Technically, after a reversal formation, the Nifty witnessed range-bound activity near the 20-day SMA.
A fresh uptrend rally is possible only after the dismissal of 19,635, above which the index can move to 19,700-19,735. On the flip side, selling pressure is likely to accelerate below 19,525 and the index can slip to 19,480-19,450.
Deepak Jasani, Head of Retail Research, HDFC Securities
Global stocks largely ticked lower on August 8, as investors assessed the latest weak economic data coming out of China and looked ahead to a key inflation reading from the US on August 10.
China's imports contracted 12.4 percent in July, way higher than the forecast of a 5 percent drop. Exports declined 14. 5 percent against economists’ estimates of a 12.5 percent drop. Italian banks came under pressure after the cabinet approved a 40 percent windfall tax on lenders. Moody's cut the credit ratings of several small and mid-sized US lenders.
The Nifty formed a bearish Engulfing pattern on August 8, however, a fall below 19,524 can lead to a faster down move. For the Nifty, 19,634-19,678 could be the resistance band in the near term.
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