Indices end in red for 4th day, Sensex falls 2.7% this week; check what’s weighing on investor sentiment

Extending the previous session’s losses, Indian share market ended nearly one per cent down on Tuesday dragged by bank stocks. BSE Sensex tumbled 475 points from day’s high to end at 37,734. While the broader Nifty 50 index settled at 11,153.65, down 0.86 per cent or 97 points today. Sensex has fallen 2.77 per cent in two days. The top contributors to today’s loss were RIL, Housing Development Finance Corporation, HDFC Bank, L&T, Axis Bank and Maruti Suzuki. In today’s session, broader markets underperformed the benchmarks with S&P BSE MidCap index falling 1.70 per cent or 247 points at 14,284. While S&P BSE SmallCap index fell 1.61 per cent or 238 points to settle at 14,509. “Markets continued to witness intense selling pressure on the back of weak global cues and profit-booking. Broad-based selling was seen, with declines outnumbering advances by more than 2:1,” Aamar Deo Singh, Head Advisory at Angel Broking, told Financial Express Online.

With the approaching monthly F&O expiry, Singh further added saying that “we are witnessing increased volatility, with crucial support for Nifty seen around the 11,000 mark whereas resistance is seen around the 11,350-11,400 mark”.

Maruti Suzuki drops 3%: Out of 30 Sensex stocks, 21 scrips ended in the red with Maruti Suzuki shares falling 2.83 per cent. It was followed by L&T, IndusInd Bank, Axis Bank, ONGC, Reliance Industries, Asian Paints and Titan Company. On the flip side, HCL Tech was the top Sensex gainer, up 2.43 per cent. TCS, Sun Pharma, Tech Mahindra, ICICI Bank and Bharti Airtel were among Sensex gainers.

Nifty Bank down 1%: Barring Nifty Pharma and Nifty IT indices, all the sectoral indices have ended in the negative territory. Nifty Bank index fell 1.07 per cent while Nifty FMCG was down 0.78 per cent.

Technical take: “The Nifty continued its downward trajectory; the markets are weak and we should see more downside in the coming days. We could go down to 10950-11000 for starters and if we don’t halt there, we could fall further to test 10800. The resistance on the upside is 10600-10650 and till we do not cross that, a sell on every rise would be the appropriate strategy to adopt,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.

What’s weighing on investor sentiment: Analysts believe that doubts about the timing of a global economic recovery emerged, following talks of further restrictions to contain a resurgence in virus infections around the world, especially in Europe. “This uncertainty hit the Indian markets also, which have been driven by liquidity and the expectation that the economy and earnings would be back on track soon. Markets seem to be consolidating and taking stock of the situation. Investors are advised to stay cautious,” said Vinod Nair, Head of Research at Geojit Financial Services.