Profit booking at higher levels, crucial support placed at 8,800

Indian markets started on a positive note but witnessed profit booking at higher levels on May 19, as the S&P BSE Sensex slipped more than 500 points from its intraday high and the Nifty50 closed below 8,900.

The final tally on D-Street: the Sensex was up 167 points at 30,196 while the Nifty rose 55 points to 8,879.

Sectorally, action was seen in telecom, power, utilities, auto, while profit taking was seen in capital goods, energy, realty and banks.

On the broader markets front, the S&P BSE Midcap index rose 0.52 percent while the S&P BSE Smallcap index fell 0.20 percent.

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Technical breakdown on May 18 indicated that the market would see selling pressure at higher levels and that is what happened. The Nifty50 pared gains after hitting an intraday high of 9,030.

Sentiment was also hit by India’s coronavirus infections going past the  1,00,000-mark.

Market participants are also disappointed with the stimulus package ,which weighed on financials for the second day in a row. The NiftyBank closed 0.5 percent lower.

“Markets around the world rallied on the back of a positive vaccine trial in the US because of which Indian markets also witnessed a positive opening. It later pared gains to end up by just around 0.6%,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

Though the trial seemed to give positive results, the development of the vaccines is still in the an initial stage and some time away from approvals and production, Nair said of the US-based Moderna’s Inc’s experimental jab.

“Meanwhile in India, confirmed infections crossed the one-lakh mark, with no signs of slowing down. Additionally, with the stimulus measures seen to be inadequate to boost demand in the short term, investors need to be cautious in this market, as uncertainties still persist,” Nair said.

Top Nifty gainers included Bharti Infratel, ONGC, Adani Ports and Bharti Airtel.

Top Nifty losers included RIL, IndusInd Bank, Vedanta, and UPL.

Top Nifty losers include names like RIL, IndusInd Bank, Vedanta, and UPL.

Stocks & Sectors

Sectorally, action was seen in the S&P BSE Telecom index which rose 10 percent, followed by the S&P BSE Power index which was up 2.2 percent, and the S&P BSE Auto index was up 1.1 percent.

Profit-taking was seen in the S&P BSE Capital Goods index that fell 1.38 percent, followed by the S&P BSE Energy index that was down 1.3 percent, and the S&P BSE Realty index slipped 0.6 percent.

A volume spike of more than 100 percent was seen in stocks like Adani Ports, Idea Cellular, UPL, Torrent Power and Adani Power.

Long Buildup was seen in stocks like Idea Cellular, Bharti Airtel, Torrent Power and Kotak Mahindra Bank.

Short Buildup was seen in stocks like Jubilant FoodWorks, Voltas, UPL, and Bank of Baroda.

More than 150 stocks on the BSE hit a fresh 52-week low. Those included PVR, ABB India, Shriram City Union and Kajaria Ceramic.

Stocks in news

Bharti Airtel | The share price hit a record 10 percent jump after global research firms CLSA maintained a “buy” on the stock with a target of Rs 670 per share.

Fertilizer stocks fall | Fertilizer stocks fell up to 9 percent after the Centre issued a draft order banning sale, use and import of 27 insecticides. UPL was down over 9 percent while Atul shed over 6 percent.

Tata Consumer Products | The stock jumped more than 3 percent after the company said it would acquire PepsiCo’s stake in NourishCo Beverages Limited.

Vedanta | The share slipped nearly 3 percent after the board approved the de-listing from the Bombay Stock Exchange and the National Stock Exchange.

Shares of multiplex chains gained as states easef lockdown. PVR and Inox Leisure were up 8-15%.

Technical View

The Nifty formed a bearish candle for the second day in a row. It failed to hold above 9,000, which it crossed in the intraday trade.
As long as the Nifty stays above 8,800, a bounce-back is possible. But, the bears will regain the upper hand, if they manage to push the index below 8,800 on a closing basis.

Traders need to be careful below 8,850, as the index may fall to 8,700 or 8,500 in the near term, say experts.

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