The domestic equity indices Sensex and Nifty closed in the red on Tuesday, with HDFC Bank being a major drag on the market. The lower-than-expected inflows for HDFC Bank were due to a staggered adjustment of its weight on a key MSCI emerging market index. This, combined with broad-based selling pressure, led to a downturn in the market.
The NSE Nifty 50 index shed 0.85% to 24,139, while the S&P BSE Sensex lost 0.87% to 78,956. Analysts have been closely monitoring the market pulse to gauge the next moves. Jatin Gedia of Sharekhan noted, „On the daily charts, we can observe that Nifty has witnessed a breakdown from the consolidation on the downside. The selling pressure can intensify on the downside. Immediate support stands at 24037 which is the 40-day moving average.“
Rupak De, Senior Technical Analyst of LKP Securities, added, „Bears have returned to the market as the index repeatedly failed to break above the 21 EMA. The near-term trend appears negative. On the upside, 24,250 now serves as a new resistance level, and as long as Nifty remains below 24,250, the strategy should be to sell on rallies.“
In the US market, Wall Street gained on Tuesday as producer prices data indicated easing inflation pressures, setting the stage for a potential Federal Reserve rate cut in September. European stocks also saw gains, with Europe’s benchmark stock index reaching a near two-week high driven by increased expectations for a US Federal Reserve interest rate cut in September.
In terms of technical analysis, the Nifty ended Tuesday’s session with a long negative candle on the daily chart, indicating the possibility of a downside breakout of the range movement. The recent swing high of 24,472 seems to be a lower top for the Nifty, and a slide below the support levels could trigger a downward correction in the market.
Stocks showing bullish bias include Inox Wind Energy, TVS holdings, V-Mart Retail, India Glycols, CDSL, Suven Pharma, and Wockhardt among others. On the other hand, stocks signaling weakness ahead include Atul, Sun TV Network, ICICI Prudential Life Insurance, and Firstsource Solutions among others.
The most active stocks in value terms were HDFC Bank, RVNL, Triveni Turbine, Suzlon Energy, ICICI Bank, SBI, and Aarti Industries among others. Vodafone Idea, Suzlon Energy, Yes Bank, RattanIndia Infra, HFCL, Easy Trip Planners, and IRFC were among the most traded stocks in volume terms.
Overall, the sentiment meter favored bears as 2,676 stocks ended in the red, while 1,266 names settled in the green. It is important for investors to stay informed about market trends and indicators to make well-informed decisions.