Sensex hits one-month high today but fails to hold gains. What experts say

Sensex hits one-month high today but fails to hold gains. What experts say thumbnail
Indian stock markets failed to hold on to gains after hitting a one-month high in intra-day trade and settled about 1% lower. Weakness in equity markets across the world amid worries of a deeper global recession weighed. At day's high Sensex rose nearly 900 points to a one-month high of 31,568, before settling 310 points…

Indian stock markets failed to hold on to gains after hitting a one-month high in intra-day trade and settled about 1% lower. Weakness in equity markets across the world amid worries of a deeper global recession weighed. At day’s high Sensex rose nearly 900 points to a one-month high of 31,568, before settling 310 points lower at 30,379. The broader NSE Nifty 50 index ended down 0.76% at 8,925.

India today entered an extended lockdown to curb the coronavirus spread but the government said it would allow opening up of some industries in rural areas after April 20. The rupee ended at a record closing low of 76.44 against the dollar.
IT firm Wipro Ltd gave up gains to close 1.4% lower ahead of its quarterly results. Top private-sector lender HDFC Bank Ltd dropped 3.6% and was the biggest drag on the indexes, while oil-to-retail conglomerate Reliance Industries Ltd closed down 3.3%. Among other major losers, Maruti, HDFC Bank, Bajaj Finance and Hero MotoCorp fell between 3% and 4% each while Kotak Bank slumped 6%.
The International Monetary Fund said on Tuesday it expected the global economy to shrink by 3.0% during 2020 in a coronavirus-driven collapse of activity that will mark the steepest downturn since the Great Depression of the 1930s.
Here is what markets participants said on today’s market action:
Shrikant Chouhan, Executive Vice President at Kotak Securities
“Nifty and Sensex opened substantially higher on the back of strong global cues but follow-up buying failed to support indices, resulting in a sharp selloff in the second half of the day. The selloff was so intense that the Nifty broke the major support of the last two days at 8,900. It is negative for the market. Nifty is heading southward to 8,700 levels. On the higher side, 9,050 and 9100 would be major hurdles in the short term. FMCG and selective IT stocks managed to close higher. The financial sector was heavily down and Bank Nifty closed 2000 points lower from the day’s high indicating a complete disinterest for the sector by the market participants.”
Rohit Singre, Senior Technical Analyst at LKP Securities.
“Index closed a day at 8925 with loss of nearly one percent forming a bearish candle on daily chart. With Nifty closing below 9,000 mark we may see some more cuts. Immediate support for nifty is coming near 8800-8700 zone and resistance is coming near 9000-9150 zone. Nifty Bank closed a day at 19057 with strong loss of more than two percent, forming bearish engulfing kind of candle pattern. Immediate resistance for Nifty Bank is coming near 19300-19800 zone and support is coming near 18800-18600 zone”.
Ruchit Jain, Equity Technical Analyst, Angel Broking
“After a mid week holiday, our markets started today with a gap up opening as hinted by the SGX Nifty. Nifty registered a high around 9261 and witnessed profit booking in the later half of the session. The index gave up all the gains and ended the day with a loss of about three -fourths of a percent. During the mid-week holiday, our government announced extension of the ongoing lock down period. However, market participants had anticipated such move in advance and hence, it was already factored in due to which we did not see any impact at opening.
“However, as mentioned in our yesterday’s report, the immediate resistance of the index was seen around 9320 which is the 38.2 percent retracement of the recent correction. Nifty almost rallied towards that resistance (made high of 9261) and then witnessed profit booking during later part of the day. If we look at the sectorial participation in the recent upmove, then it is seen that the Pharma and the FMCG space have outperformed and have taken the leadership this time. Whereas the banking space has been an under performer in this upmove as there is no ‘Higher Top Higher Bottom’ formation yet in Bank Nifty and this index has just retraced about 23.6 percent of the recent correction compared to 38 percent for Nifty.
“Traders are advised to watch for the outperforming counters and trade in such names along with the momentum. As far as levels are concerned, the immediate supports for Nifty are placed around 8800 followed by 8650; whereas 9260-9320 would be the immediate resistance to watch for.”
Ajit Mishra, VP – Research, Religare Broking Ltd.
“The Indian markets exhibited a volatile move and settled with a cut of over half a percent. The benchmark opened on a firm note, tracking positive global cues however significant selling pressure in the latter half pushed the index lower. The broader markets outperformed wherein both midcap and smallcap ended higher by 1.3% and 1.2% respectively. We reiterate our cautious view on Indian markets and suggest not to go overboard during this recovery move. Domestic factors viz. sharp surge in the coronavirus cases and extension of the lockdown will continue to weigh on the investors’ sentiment ahead.” (With Agency Inputs)
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