Sensex, Nifty end in red for 7th straight day amid volatility on F&O expiry; all eyes on RBI MPC meet decision

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BSE Sensex and NSE Nifty 50 settled lower after a volatile trade on the day of monthly F&O expiry. BSE Sensex fell 188 points or 0.3 per cent to end at 56,410, while NSE Nifty 50 slipped 40.50 points or 0.24 per cent to settle at 16818. Investors will keenly watch RBI MPC meet outcome on Friday. Index heavyweights such as Asian Paints, TCS, Kotak Mahindra Bank, ICICI Bank, Bajaj Finance, Reliance Industries, among others contributed the most to the indices’ loss. Broader markets outperformed the equity frontliners. S&P BSE MidCap index gained 0.3 per cent or 75 points to end at 24513, while S&P BSE SmallCap added 0.6 per cent or 176 points to finish at 28,047. India VIX, the volatility index, fell 3.6 per cent to end at 21.30 levels.

Also read: India a ‘bright spot’ in car sales, even as Moody’s cuts global outlook to ‘negative’; Europe weakest

Market was extremely volatile on the F&O expiry day, and traders preferred to cut their position in some of the rate-sensitives ahead of the credit policy announcement. The market is already in an oversold position and if the rate hike is above the estimate, then we could see bouts of intra-day volatility with a negative bias for some more time. Technically, despite a solid start, the benchmark Nifty failed to sustain above the 200-day SMA (Simple Moving Average) or 17000 level. In the intraday time frame, the index has formed a double top formation and conversely it is consistently taking support at 16800. As long as the index trades above 16800, the chances of a quick pullback rally is bright. Above the same, the index could retest 16950-17000 levels. However, below 16800, the index could slip till 16700-16650.

Vinod Nair, Head of Research at Geojit Financial Services

The initial upticks of the domestic market were short-lived due to its weak global peers and declining rupee. As the yield differential between India and the US fell to a multi-year low of 348 bps, foreign investors are still departing from the Indian market. Amid the ongoing global trend of aggressive rate hikes, markets are braced for a 50 bps increase by RBI. Investors eagerly await the central bank’s intervention to aid bank liquidity, curb currency depreciation, and provide updates on its monetary stance & GDP outlook.

Also read: RBI MPC may go with 35-50 bps repo rate hike in Sep monetary policy; may lower GDP growth forecast

Mohit Nigam, Head – PMS, Hem Securities

Investors can accumulate quality stocks in this sector for good return in the medium term. We believe investors should remain cautious ahead of the RBI’s monetary policy meeting later this week. a 50 bps interest rate hike is expected from RBI. On the technical front immediate support and resistance in Nifty 50 are 16700 and 17200 respectively. Immediate support and resistance in Bank Nifty are 37250 and 38250 respectively.

Palak Kothari, Senior Technical Analyst, Choice Broking

On the call side, the highest OI was witnessed at 17000 while on the put side was at 16500 level. The hourly momentum indicator RSI bounced from the oversold zone as well as bullish divergence has been seen which points out some upside correction can be seen. The support for Nifty has shifted around 16700 levels while on the upside 17050 may act as an immediate hurdle. On the other hand, Bank Nifty has support at 37000 levels while resistance at 38500 levels. Overall, the Nifty is trading in the range of 16750-17050 level and either side breakout will show the direction. Pharma & media sector stocks are looking good for trade. One can add on dips.