Sensex, Nifty fall for 2nd straight day on weekly F&O expiry; Bank Nifty looks bullish, use buy on dips

Posted on by

Domestic equity market benchmarks BSE Sensex and NSE Nifty 50 ended in the red for the second straight day on Thursday, a day of weekly F&O expiry. BSE Sensex fell 412 points or 0.7 per cent to end at 59,934, while NSE Nifty 50 slipped 126 points or 0.7 per cent to finish trade at 17,877.40. Index heavyweights such as Infosys, Reliance Industries Ltd (RIL), Axis Bank, HDFC Bank, and Kotak Mahindra Bank, among others contributed the most to the indices loss. Broader markets outperformed equity frontliners. S&P BSE MidCap index gained 82 points to end at 26,307, while S&P BSE Smallcap index was up 19 points to settle at 29,911.

Also read: Tata’s 5-year plan to make Air India great again: 30% market share, ‘fixing the basics’, other key focus areas

The Bank Nifty index witnessed some profit booking at higher levels which indicates 41,800-42,000 will act as an immediate hurdle on the upside. The lower-end support stands at 40,000 levels where one of the highest open interests is built up on the put side. The undertone remains bullish and once should keep a buy-on-dip approach as long as it holds the support of 40,000 on the downside.

Deepak Jasani, Head of Retail Research, HDFC Securities

Nifty corrected once again from above 18000 level and underperformed the other markets for a change. Broad markets continues to lag while largecaps seemed to be under mild selling pressure. 18096-17771 could be the band for the Nifty in the near term.

Also read: WPI inflation may ease off to single digit by Oct; RBI MPC may hike repo rate by 50 bps in Sep

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

We saw markets rallying sharply over the past week, so profit-taking was on expected lines. Volatility would continue due to concerns of a hawkish stance on rate hikes from the central banks amid rising inflation. In an uncertain market, stock & sector-specific buying activity could gain momentum. Nifty has formed a bearish candle on daily charts and a double top formation on intraday charts indicating continuation of weakness in the near future. The trading set up suggests that a fresh round of selling is possible only after the dismissal of the 17800 support level. If the index trades above 17800 then it could retest the level of 18100- 18150. On the flip side, below 17800, a quick intraday correction is not ruled out. Below which, it could slip till 17700-17650.

Vinod Nair, Head of Research, Geojit Financial Services

Defying the positive trend of global markets, domestic indices shed its early gains, dragged by losses in IT and pharma sectors, while mid & small caps outperformed. Fears of a recession in the global economy exacerbated selling pressure in IT and pharma stocks. Mid & small caps are expected to continue their trend in the short to medium term as they are trading reasonably well compared to large caps and at a discount to their historic valuation. Globally, in light of the elevated inflation in the US, investors are on an edge, assessing the possibility of a higher magnitude of a rate hike in the next Fed policy meeting.