Investors book profit on expiry day; Sensex down over 300 pts

Indian markets fell for the second consecutive day in a row on Thursday amid F&O expiry jitters to close below crucial support levels. The S&P BSE Sensex plunged by about 300 points while the Nifty50 broke below 12,200 levels.

Let’s look at the final tally on D-Street – the S&P BSE Sensex plunged 297 points to 41,163 while the Nifty50 fell 88 points to close at 12,126.

Sectorally, action was seen in metals and consumer discretionary stocks while profit taking was seen in telecom, energy, capital goods, and banking stocks.

The broader market outperform as the S&P BSE Midcap index was down by 0.13 percent while the S&P BSE Smallcap index was up 0.38 percent.

The index expired December series at 12,127 with a loss of 0.20 percent on expiry to expiry basis and formed a Doji candle pattern on the expiry chart hinting indecision in the markets.

If we look at the January series data it suggests the highest Put open interest is standing in 12,000 PE followed by 11500, and on the higher side, highest Call open interest is at 12,200 CE followed by 12,500 CE zone hinting immediate range for January series.

Experts are of the view that the consolidation is likely to continue for some more time amid the lackluster trading due to the ongoing holiday season.

“Market started-off on a flat note on the holiday-shortened week, however, consolidation extend on account of F&O expiry led volatility and concern over the fiscal math of the government due to possible delay in divestments planned this fiscal,” Vinod Nair, Head of Research, Geojit Financial Services told Moneycontrol.

“Global markets seem to be in comfort zone fuelled by hopes of easing trade tension, while the domestic market is expected to wait for cues from the budget,” he said.

Top Nifty gainers – Bajaj Finance, ONGC, Vedanta, Tata Steel

Top Nifty losers – IOC, RIL, Bharti Airtel, and YES Bank

Stocks & Sectors:

Sectorally, the S&P BSE Metal index was up 0.6 percent, followed by the S&P BSE Consumer Discretionary index which was up 0.05 percent.

In terms of stocks that are on the losing front – the S&P BSE telecom index was down 1.7 percent, followed by the S&P BSE Energy index which fell 1.4 percent, and the Capital Goods index fell 1.1 percent.

Volume spike of 100-200% was seen in stocks like Hexaware Technologies, and GMR Infra.

Long Buildup – Marico, LIC Housing Finance, Shree Cement, Asian Paints

Short Buildup – Godrej Consumer Product, Tata Power, Cipla, HCL Tech

Stocks in the news:

Three stocks that are going out of the derivative segment from Dec expiry are Hexaware, Tata Elxsi and Union Bank. And, four more stocks will be going out after January expiry that includes names like Castrol, Dish TV, NBCC, and Tata Motor DVR.

Eveready Industries: Eveready Industries jumped 5 percent on December 26 after the company was allowed to go ahead with the sale of its property at Hyderabad.

Coffee Day: CCD added over 2% on December 26 after a media report suggested that private equity firms KKR and Apax Partners are the only ones left in the race for a significant stake purchase in Café Coffee Day (CCD).

Metal stocks gain: Metal stocks ended in the green after US President Donald Trump said on Tuesday he and Chinese President Xi Jinping will have a signing ceremony to sign the first phase of the US-China trade deal agreed to this month.

Yes Bank: Yes Bank share price fell 4 percent on December 26 on the back of rating downgrade by Brickwork Ratings.

Technical View:

Nifty50 formed a bearish candle on the daily charts for the 2nd day in a row

It closed below its 5-Days EMA as well as 13-Days EMA, but above 20-Days EMA

MACD is on the verge of giving a bearish signal on the Nifty

Market likely to trade in a range and any recovery attempt is likely to remain short-lived.

For time being traders are advised to avoid buying the dip and positional traders can consider shorts on any recovery attempt in next session preferably around 12150 levels with a stop above 12200 on a closing basis, suggest experts.

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