Market snaps 5-day winning streak; Nifty holds 10,700 levels

Indian markets snapped a five-day winning streak and closed in the red with losses of nearly 1 percent on July 8. The S&P BSE Sensex fell over 300 points while the Nifty50 gave up 10,800 but managed to hold on to 10,700 levels.

The S&P BSE Sensex fell 345 points to close at 36,329 while the Nifty50 ended with losses of 93 points at 10,705.

Sectorally, action was seen in metals, FMCG and healthcare stocks while profit-taking was visible in realty, auto, IT, and consumer discretionary stocks.

The broader markets outperformed the benchmarks. The S&P BSE Midcap index fell 0.39 percent while the S&P BSE Smallcap index was down 0.43 percent.

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Weak global cues and rising COVID-19 cases weighed on sentiment. The Nifty50 was already trading in the overbought zone, hence some profit-taking was on the cards.

“The benchmark indices continue their volatile moves and ended with losses. Losses were led by auto and IT indices. European markets also opened lower,” Vinod Nair, Head of Research at Geojit Financial Services told .

“Markets were volatile as virus infections continued to mount and uncertainty increased regarding economic recovery. Volatility is expected to continue and investors need to maintain a stock specific view on the market,” he said.

Top Nifty gainers included Hindalco, JSW Steel, Vedanta, and IndusInd Bank.

Top Nifty losers included Bajaj Finance, ZEE Entertainment, Asian Paints, and Tata Motors.

Stocks & Sectors

Sectorally, the S&P BSE Metal index rose 1.7 percent followed by the S&P BSE FMCG index that was up 0.76 percent. The S&P BSE Healthcare index gained 0.51 percent.

Realty index that fell 2.05 percent followed by the S&P BSE Auto index that was down 1.9 percent and the S&P BSE IT index fell 1.94 percent.

Volume spike of more than 100% was seen in stocks like JSW Steel, NMDC, Canara Bank, Vedanta, SAIL, and Idea.

Long buildup was seen in stocks like SAIL, Canara Bank, and Tata Chemicals.

Short Buildup was seen in stocks like Balkrishna Industries, ZEE Entertainment and Bajaj Finserv.

More than 100 stocks on the BSE hit their fresh 52-week high. These included names like Dixon Tech, L&T Infotech, Bharat Rasayan and Britannia Industries.

Stocks in news

IndusInd Bank jumped over 4 percent on reports of US-based hedge fund Route One Investment Company initiating talks to increase its stake in the Hinduja Group-backed lender.

Kamat Hotels share price jumped almost 10 percent after Merlin Marketing acquired stake in the company. Merlin Marketing Pvt has acquired 3.5 lakh equity shares of Kamat Hotels India (representing 1.48 percent of its total paid-up equity capital) at Rs 34.76 per share.

State Bank of India | CMP: Rs 191.70 | Shares gained over a percent after the PSU bank lowered its Marginal Cost of Funds based Lending Rate (MCLR) by 5-10 bps in the shorter tenors, with effect from July 10. SBI’s MCLR for the tenor upto three months has been lowered to 6.65 percent per annum. This is the fourteenth consecutive reduction in the lender’s MCLR.

Shriram Transport Finance jumped almost 5 percent after the company said that it will launch its rights issue on July 16 to raise Rs 1,500 crore. The issue will close on July 30 with the price been fixed at Rs 570 per share.

Yes Bank gained over a percent after the board of the private lender approved a plan to raise funds. The Capital Raising Committee (CRC) of the board of directors approved fund-raise through a follow-on public offer. The details of the offer would be shared after completing formalities with the Registrar of Companies.

Canara Bank share jumped 4 percent after the bank reduced interest rate by 10 basis points across all tenors including one year, six months, three months, one month and overnight tenors.

Technical View

The Nifty formed a bearish candle on daily charts. It took support near 5-day EMA placed at 10,668.

If the Nifty witness a follow-through selling below 10,676 levels in the next trading session, the initial targets for the Nifty shall be in the zone of 10,485 – 447 levels

For the time, upsides shall remain capped in the zone of 10847-10,885 levels and upward strength shall not be expected unless the Nifty registers a close above its 200-day moving average whose value is placed around 10,885 levels.

“Traders are advised to avoid buying dips in a hurry and positional traders with high risk appetite can remain short with a stop above 10900 levels,” Mazhar Mohammad of said.