Sensex, Nifty snap 5-day gaining run; are bears returning to Dalal Street?

Sensex, Nifty snapped their 5-day gaining streak today and ended with losses. S&P BSE Sensex now sits at 45,959 while the 50-stock NSE Nifty was at 13,478 on Thursday’s closing bell. Index heavyweights such as Reliance Industries, HDFC Bank, ICICI Bank all closed the day with losses. Broader markets mirrored the fall and closed with losses. BSE Midcap and BSE Smallcap index fell more than the benchmark Sensex. Among sectors, only Nifty FMCG, Nifty Metal, and Nifty Realty closed with gains while others were in the red.

Deepak Jasani, Head, Retail Research, HDFC Securities –

“Indian benchmark equity indices ran into profit booking on December 10, though they recovered smartly from intra day lows. Stocks were mostly lower Thursday in Asia after weakness in technology companies’ shares led an overnight decline on Wall Street. Bets on more European Central Bank stimulus kept Europe’s main stock markets and the euro steady on Thursday. Nifty after filling the upgap made on Dec 09, has closed at the intra day high. The hitherto performing sectors are undergoing a correction while defensives like FMCG have started to perform.  An upward breach of 13549 could result in resumption of uptrend. Till then doubts will remain as to whether we have made an intermediate top.”

Vinod Nair, Head of Research at Geojit Financial services –

“After five days of a bullish rally, the domestic market reversed along with Asian peers, backed by weak global markets, triggering profit booking across major sectors. European indices are trading positive ahead of monetary policy announcement by European central bank and UK & EU having decided to finalise the Brexit deal by this Sunday. Markets being at the highest level, any unfavourable events, domestic or global, can result in temporary profit booking. However, we believe that the market is optimistic enough to continue the rally post a required consolidation.”

Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments –

“After resisting at higher levels, the Nifty took a breather and came down to the lower end of the range which is 13400 but was quick to recover and close above the 13450 levels. This rangebound movement between 13400-13700 may continue for a couple of sessions before the market decides on its new course of action and the direction it wishes to pursue. Traders are advised caution; we need to approach this resistance zone meticulously.”

Ajit Mishra, VP – Research, Religare Broking –

“Markets ended marginally lower in a range-bound session, taking a breather after the recent surge. Weak global cues led to a gap down opening in the benchmark which further inched lower on the back of profit-taking by the participants. Indications are in the favour of some consolidation in the index and it would be healthy for the markets. Nifty has critical support at 13,350 and its breakdown may result in further correction ahead. In the case of a rebound, the 13,550-13,600 zone would act as a hurdle. Defensive viz. FMCG, IT and pharma tend to do well during the corrective phase but traders should maintain caution in the selection of the stocks as we’re seeing selective participation.”

Manish Shah Founder Niftytriggers –

“The momentum in Nifty is still strong despite international markets showing a loss of strength in last couple of days. Nifty holds below the monthly pivot of 13591 Once it manages to trade above 13590-13600 we can expect a rally towards 13776-13800 before the end of the current expiry. Nifty is currently showing overbought readings on oscillators and it is also just a tad below the rising channel line. There are no tell-tale signs of a reversal and as long as Nifty remains above 13350 the underlying remains bullish. A break above 13600 should see the market rallying to 13776-13800.”