Nifty#39;s movement suggests buying interest missing

A day of consolidation for the Indian market just ahead of the ‘Holi’ holiday suggests that traders preferred to remain on the sidelines. The S&P BSE Sensex closed with positive bias while Nifty50 managed to hold on to 11,500 levels.

But, can we say that the momentum is fizzling out? To a certain extent, yes. But a close above 11,556-11,600 would negate that theory, and investors will be better off staying with financials.

The final tally – the S&P BSE Sensex rose 23 points to close at 38,386 while the Nifty50 closed 11 points lower at 11,521 on March 20.

In terms of sectors, capital goods, IT, and realty stocks led the rally while some profit taking was seen in oil & gas, power, and auto index.

The Nifty IT gained on weakness seen in the rupee as investors expect a “patient approach” by the Federal Reserve, suggest experts.

The S&P BSE Mid-cap index closed 0.36 percent lower while the S&P BSE Small-cap index closed 0.33 percent lower.

It looks like the market took more of a breather but the larger trend is still intact. On March 22, markets will react to the US Federal Reserve policy outcome. Niffy has to continue to hold above 11450 zones to extend its up move towards 11600 zones while on the downside major support exists at 11380 zones.

“Technically, Nifty formed a bearish candle, but at the same time, it has been holding above crucial support levels. The significant of bearish candle indicates that the pace of buying interest is missing after a 1000-point rally in the past four weeks. In terms of the pocket of opportunities, we saw some outperformance in the Bank Nifty which rallied 70 points while Nifty closed with a negative bias. Consolidation is clearly visible but banking stocks are likely to do well especially Kotak Bank, and HDFC Bank. The metal sector is likely to outperform,” Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services told Moneycontrol.

Stocks in news

Punjab National Bank gained more than 3 percent after fugitive Nirav Modi arrested in London.

The share price of Vodafone Idea rose 3 percent after the company board approved the rights issue of Rs 25,000 crore.

Shares of Newgen Software Technologies gained 10 percent after the company secured another patent for its invention – integrated and automatic generation of carbon credits.

Shares of beleaguered airline Jet Airways fell nearly 5 percent after six aircraft were grounded on March 19. The cash strapped airline has lost 10 aircraft in the last two days taking the total number of attrition to 78 planes.

SpiceJet could benefit from cash-strapped Jet Airways being forced to ground planes, and the low-cost carrier is in talks with lessors to lease some of those aircraft, Reuters said in a report quoting a person with direct knowledge of the matter. The stock rose 16% to close at Rs 91.65.

Global Update

European markets are trading lower on Wednesday as investors await a policy decision from US Federal Reserve.

Asian markets ended mostly lower on Wednesday with Hang Seng shed 0.33 percent, to close at 29,320.97, while Shanghai Composite ended flat at 3,090.64.

Kospi closed flat at 2,177.10 and Nikkei ended higher at 21608.92.