Sensex holds 38K; Nifty takes support at 200-EMA

Bears remained in control of D-Street for the third consecutive day in a row to hit a fresh 2-month low on July 22. Sensex managed to hold on to 38,000 towards the close after it breached the level intraday. Nifty got support near its 200-day exponential moving average (EMA).

Selling in heavyweights like HDFC twins, ITC, and Bajaj Finance kept the market under pressure. Banking stocks remained under pressure with Nifty Bank recording a fall of nearly 500 points or 1.63 percent.

In terms of sectoral losers, the S&P BSE Finance index fell 2.2 percent, followed by the S&P BSE FMCG index that was down 1.4 percent, and the S&P BSE Bankex that was down 1.4 percent.

In the broader market, S&P BSE Smallcap index fell 1.1 percent, while the S&P BSE Midcap index was down by 0.6 percent.

The fall in the benchmark indices was largely due to muted global cues, mixed earnings from India Inc. that reflected signs of a slowdown in the economy, persistent selling by foreign investors, and fall in key heavyweight stocks in the banking pack.

The market is likely to remain volatile ahead of the F&O expiry on July 25 The next big support for the index is placed at 200-day exponential moving average placed at 11,294, and below that 200-day moving average level placed at 11,127.

But, after witnessing a fall from a high of 11,982 on July 5, the index is trading near key support levels and should ideally see a technical bounce back, suggest experts.

“Nifty should see a bounce from current levels after a sharp fall from the high of 11,982 over the past 13 days,” Vikas Jain, Senior Research Analyst, Reliance Securities told Moneycontrol.

“Volatility in the market will be high concerning F&O expiry this week and earnings of individual stocks. On the higher side, 11,480-11,500 will act as strong resistance for Nifty over the next few days,” he said.

Stocks in news:

RIL rose 2.5 percent after it reported a consolidated profit after tax of Rs 10,104 crore for the June quarter, up 6.8 percent from a year ago.

Shares of Kotak Mahindra Bank fell 3 percent despite brokerages said the lender is expected to report healthy growth in June quarter.

HDFC Bank shares fell 3 percent after moderate weakness in Q1 asset quality and a slowdown in retail loan growth, but brokerages remained positive on the stock.

Shares of Oriental Bank of Commerce (OBC) shed 2 percent despite the company posted a profit of Rs 112.7 crore in the quarter ended June 2019 (Q1FY20).

Cipla was down over 1 percent after the US drug regulator issued seven observations to the Bengaluru facility.

Shares of Avanti Feeds surged 7 percent after the company posted better numbers for the quarter ended June 2019.

Global update:

Asian markets ended lower with Shanghai Composite shedding 1.27 percent at 2,886.97, Nikkei slipped 0.23 percent to 21,416.79, while Kospi ended marginally lower at 2,093.34.