Markets snap 6-day winning streak; heavyweights drag Nifty below 8,150

The benchmark indices hit a roadblock after six-straight sessions of gains, amid weak global cues, as investors booked profits at higher levels among financials and index heavyweight shares.

The 30-share Sensex closed lower by 190 points at 26,846 and the 50-share Nifty dipped 48 points at 8,129.

The broader markets ended dismal in line with the benchmark indices. BSE Midcap index slumped over 1% and the Smallcap index dipped by 0.1%.

Market breadth remained weak on the BSE with 1,429 shares declining and 1,005 shares advancing.

In the currency front, the rupee depreciated 12 paise to 65.08 against the dollar at the Interbank Foreign Exchange on buying of the US currency by importers.
 

MARKET VIEW

According to Ranak Merchant, Technical Analyst - Strategies of Sushil Financial Services, “The indicated Inverse Head and Shoulder Pattern played out well and targets of 8,225 were missed by a whisker as benchmark Nifty retreated from multiple tops near 8,197 (200 day EMA). The correction after the current bounce back rally augurs well for the markets and the support zone of 8,050 would provide a good entry opportunity for short term traders. With major events now behind us, cues would be derived from the upcoming results season and world market moves. Watch support of 8,050 for potential targets of 8,200-8,225."

Says K. Subramanyam, Co-Head Equity Advisory, Altamount Capital, “The month has so far been very exciting. Levels of 8050-8100 which were expected to be resistance areas have been cleared. The market should ideally consolidate around these levels now."

He further adds, “If the corporate results are better than expected, the market could see higher levels of 8400-8500 going ahead. Else it could remain flat to negative. Investors could use these sharp swings to book some profits in beaten down sectors which have seen a good run. Lower levels could be used to add quality shares where visibility is positive".

GLOBAL MARKETS

Global stocks traded just off three-week highs on Thursday after unexpectedly weak trade and machinery orders data from Germany and Japan hinted at a stalling in the momentum of some of the world's biggest economies.

An oil price bounce, a flat dollar and gains in Chinese markets provided some support, but with worries growing over Germany and the US Federal Reserve due to release minutes of its last meeting, investors were wary of extending world shares' six-day rally any further.

MSCI's all-country equity index was flat after rebounding 7% since last Friday when weak US jobs data led to expectations that the first Fed rate rise in almost a decade would be delayed into next year.

Emerging assets also retreated after strong gains in recent days, with MSCI's equity index fell 0.6% and most currencies easing against the dollar.

However, Chinese shares rose 3%, playing catch-up with the past week's global rally.

SECTORS & STOCKS

BSE FMCG, Healthcare and Oil & Gas indices plummeted over 1% followed by counters like Auto, Banks, Capital Goods, Power and Realty, all dipping by almost 1% each. However, BSE Consumer Durables and Metal indices were up 0.4%.

From the FMCG pack, ITC lost around 2% on the media reports of a likely ban on loose cigarettes in the northern state of Uttar Pradesh.

Index heavyweight Reliance Inds plunged almost 3% on the media buzz that the company may be asked to pay Rs 12,000 cr fine to ONGC for the gas issue.  ONGC declined by nearly 2%.

From the financial space, ICICI Bank, Axis Bank, HDFC Bank and HDFC plunged between 0.4-1%. Bank shares witnessed significant rally in last few trading sessions after the RBI surprised the street with 50 bps rate cut.

A number of banks have cut their base rate after the Reserve Bank of India (RBI) cut its benchmark interest rate viz. the repo rate by 50 basis points after a monetary policy review late last month.

Mahindra & Mahindra (M&M) declined almost 1%. The company announced that global credit rating agency Moody's Investors Services has assigned Baa3 foreign currency and local currency issuer rating with stable outlook to the company.

Other notable losers were GAIL, Lupin, Sun Pharma, NTPC and TCS.

On the gaining side, Vedanta, Hindalco, Tata Steel, Dr Reddy’s Labs and Tata Motors were up 1-2%.

Tata Steel, which will commission a 3 million tonne steel plant in Kalinganagar by December, plans to scale up its operations gradually. Also, Tata Steel said its subsidiary in the UK and the trustee of the British Steel Pension Scheme had concluded the triennial actuarial valuation of the scheme.  Shares of Tata Steel were up almost 2%.

SMART MOVERS

Force Motors moved higher by 7% on the BSE, its highest level since August 5, 2015.

Shares of Tribhovandas Bhimji Zaveri (TBZ) gained 9% to Rs 134 on the BSE after the company announced an arrangement with Snapdeal to showcase their high quality diamond jewellery and gold coins anytime, anywhere on online marketplace.

Shares of New Delhi Television Limited (NDTV), Elgi Equipments and Ess Dee Aluminium rallied more than 10% on the BSE in an otherwise weak market on back of heavy volumes.

Man Industries gained around 5% on the BSE after the company announced that it has received orders worth approximately Rs 700 crore from international and domestic customers for supply of pipes for oil, gas and water sector projects.

Shares of Genesys International Corporation was locked in upper circuit of 20% at Rs 69.30 after the company announced that Quikr, an online cross-category classifieds company, is making an investment in Genesys' venture A.N.Virtual World Tech Ltd.

HCL Infosystems rallied 10% to Rs 56.90, extending its previous day’s 20% rally on the BSE, after Derive Investments, an investment company run by Radhakishan Damani, bought nearly two percentage point’s stake in the company at an average price of Rs 49.38 apiece through open market.

With Reuters input