Nifty might have made an intermediate top; stay stock specific

In a repeat of the previous session, the market opened in green and ended in the red, after volatile trading on April 4.

The NiftyBank hit a record high just days ahead of the RBI MPC meet outcome that signifies that traders looked to book profits once it was announced.

The final tally – the S&P BSE Sensex closed 192 points lower at 38,684 while the Nifty50 dropped 45 points to close at 11,598.

The repo rate cut of 25 bps was already discounted by markets and thus it failed to trigger any fresh momentum in the market. Most of the rate sensitive sectors such as banks, financials, infra sector closed the day in the red.

Both Nifty and Bank Nifty fell for the second consecutive day in a row to close below their crucial support levels. The recent rally in banking stocks was one of the reasons why Nifty scaled record high.

The Nifty Bank closed below its crucial psychological level of 30,000 while Nifty50 failed to hold on to 11,600 that signifies that there is a possibility that we might have formed an intermediate top.

Unless strength comes back to financials, it will be difficult for Nifty50 to scale new highs, suggest experts. A close above 11,761 on the Nifty and 30,648 on Bank Nifty would negate the negative implication of the bearish candle formed on technical charts.

“The way Bank Nifty has underperformed in the last 4-5 days suggests that there is some tiredness at higher levels. The index formed a bearish candle and closed below its crucial support at 30,300. So, I think we are due for some short term correction in the index,” Vishal Malkan, Founder Malkansview told .

“In terms of Nifty, we feel that the index has underperformed the Bank Nifty because it just retested its previous high of 11,760 and formed a bearish pattern. The index is also due for some short term retracement and not a reversal in the next few trading session,” he said.

Stocks in news:

Godrej Properties gained nearly 3 percent as the company is going to develop a new luxury residential project in Mumbai.

The share price of SRF rose more than 4 percent after the company informed about the resumption of operations at its Gujarat plant at the earliest.

Dish TV India shares were up nearly 2 percent after a media report indicated that the company may be acquired by Bharti Airtel and Singtel.

Wipro shares declined 1 percent after a media report indicated that the government is likely to have sold enemy shares in the company.

Global Updates:

European markets are trading marginally lower amid ongoing US-China trade talks.

Asian markets ended mixed with Shanghai Composite gaining 0.94 percent at 3,246.57, while Hang Seng shed 0.5 percent at 29,936.32.

Nikkei up marginally at 21,724.95 and Kospi gained 0.15 percent to close at 2,206.5.