A choppy start to the week, Nifty closes below 9,300

After a strong opening, the market failed to hold on to the gains on April 20 and turned choppy, tracking a muted trend in other Asian markets. The S&P BSE Sensex rose more than 50 points while the Nifty50 gave up 9,300 towards the close.

Let’s look at the final tally on D-Street: the Sensex rose 59 points to close at 31,648 while the Nifty fell 4.9 points to close at 9,261.

Sectorally, the action was visible in IT, energy and oil & gas stocks while the profit taking was seen in metals, telecom, FMCG and the auto index.

Broader markets fell on similar lines. The BSE Midcap index was down 0.21 percent, and the S&P BSE Smallcap index rose 0.8 percent.

Muted global cues, as well as uncertainty around earnings from India Inc for the March quarter, weighed on sentiment. The Nifty witnessed profit-taking above 9,300 for the second session in a row.

“Uncertainty ruled the markets and lack of direction from earnings results or the global markets meant that the Indian benchmark indices ended flat after a volatile trading day,” Vinod Nair, Head of Research, Geojit Financial Services, told Moneycontrol.

“Sentiments were mixed regarding the recovery in corporate earnings, post easing of lockdown measures, and effectiveness of RBI measures to infuse liquidity into the financial system. Rate of spread of virus infections and stock-specific earnings guidance will be in focus.”

Top Nifty gainers were Sun Pharma, HDFC Bank, Infosys and Tata Motors.

Top Nifty losers include Grasim Industries, Axis Bank, Bharti Infratel, JSW Steel, and Hindalco Industries.

Stocks & sectors

Sectorally, the S&P BSE IT index rose 2.6 percent followed by the S&P BSE Energy index that was up 1.3 percent, and the S&P BSE Oil & Gas index that climbed 1.1 percent.

Profit-taking was seen in the S&P BSE Metal index that slipped 3.3 percent, followed by the S&P BSE Telecom index that was down 2.5 percent and the S&P BSE FMCG index that ended 1.9 percent lower.

A volume spike was seen in MindTree, NMDC, YES Bank, Adani Enterprises and BEL.

Long Buildup was seen in stocks like BEL, Infosys, NALCO, TCS and Equitas.

Short Buildup was seen in stocks like SAIL, Apollo Tyres, Bharti Airtel, and Ujjivan Financial Services.

Stocks in news

HDFC Bank: The stock rose almost 4 percent after the company posted better numbers for the quarter ended March. On April 18, the lender reported a 17.72 percent year-on-year growth in profit at Rs 6,927.69 crore for the quarter. Slippages fell to a 10-Qtr low.

Eros International: The share jumped 10 percent after the company announced an all-share merger with Hollywood’s STX Entertainment to create an equally-held global entertainment company.

Infosys: Shares jumped almost 4 percent ahead of the company’s March quarter earnings. The estimates of brokerages suggest the country’s second-largest IT company is likely to report around 5 percent sequential decline in Q4 FY20 profit due to lower other income and absence of tax benefits.

IRB Infra: The share jumped 5 percent after the company received the nod for the resumption of collection of user fees at all toll plazas on national highways and expressways from April 20.

ICICI Bank: The share fell over 3 percent after global rating agency S&P revised the private lender’s outlook to negative from stable on the potential impact of the coronavirus outbreak.

Tata Motors gained 5 percent despite reporting lower wholesale sales in Q4.

Technical View

The Nifty formed a Bearish Engulfing formation.

If the index trades below 9230 levels, the weakness is likely to extend towards the 9,103 – 9,091 level.

If it sustains above 9,390, then the upswing shall initially face resistance around 9,468 and a decisive close beyond that hurdle shall open up a new target of 9,800.

For the time, traders should avoid long side bets, whereas intraday traders can consider shorting below 9,230 and look for a target of 9,100 with a stop above intraday high, say experts.

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