Profit-booking hits D-St; Nifty below 10,800 but rallies 1.5% for the week

Indian markets witnessed profit-booking at higher levels on July 10, tracking a muted trend in global markets. It recouped some of the intraday losses but the S&P BSE Sensex fell over 100 points while the Nifty closed below 10,800 towards the close of the trade.

The S&P BSE Sensex ended 143 points lower at 36,594 while the Nifty50 slipped 45 points to 10,768.

Market breadth favoured declines; advance-decline ratio at 1:2

For the week, the Nifty50 and the S&P BSE Sensex rose 1.5 percent each. In terms of sectors, the NiftyBank rose 2.5 percent and the Nifty Metal rallied 3.5 percent.

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Markets continued their volatile movements and ended the day negative, tracking mixed global cues. The market saw profit-taking at higher levels, and it looked like the index was in a no-trade zone. Traders should wait for a breakout above 10,900 or a break down below 10,676 levels (intraday low of July 8), say experts.

“Global stocks were mixed following record infections in the US, which led to worries of delayed global economic recovery, while Indian markets worried about record cases of infections and increasing localized lockdowns. However, on a weekly basis, the benchmark indices gained around 1.5%,” Vinod Nair, Head of Research at Geojit Financial Services told .

“The weekly gains were mainly driven by liquidity and the hope that the virus would be contained soon and businesses back to normal. However, the outlook for the market is volatile, as the earnings announcements have begun after a washout quarter for most industries.”

Nair added that this uncertainty combined with profit-booking happening after the recent rally means that the volatility is expected to continue and investors would do well to be cautious and stock-specific.

Also Read – Gainers & Losers: 10 stocks that moved the most on July 10

Sectorally, the action was seen in energy, telecom, healthcare, realty, and FMCG stocks while profit-taking was visible in banks, finance, and consumer durable stocks.

On the broader markets front, the S&P BSE Midcap index fell 0.72 percent while the S&P BSE Smallcap index was down 0.35 percent.

Top Nifty gainers included Britannia Industries, Sun Pharma and RIL.

Top Nifty losers included HDFC, GAIL India, IndusInd Bank, and Axis Bank.

Stocks & Sectors

Sectorally, the S&P BSE Bankex was down 2.2 percent followed by the S&P BSE Finance index that fell 1.9 percent and the S&P BSE Consumer Durables index was down 1.8 percent.

The S&P BSE Energy index was up 2.2 percent, S&P BSE Telecom index was up 0.75 percent and the S&P BSE Healthcare index rose 0.67 percent.

Volume spike of more than 100 percent was seen in stocks like Biocon, IDFC First, and Equitas

Long Buildup was seen in stocks like Idea, Equitas and Godrej Properties.

Short Buildup was seen in stocks like PNB, Century Textiles and MGL.

More than 100 stocks on the BSE hit a fresh 52-week high. They included Bharat Rasayan, Britannia Industries, RIL and L&T Infotech.

Stocks in news

TCS gained 2 percent from lows to end 1 percent higher on positive management commentary,

Britannia Industries surged to life high; HUL & Sun Pharma were other top Nifty gainers.

HDFC Life & SBI Life gained on a significant improvement in premium on MoM basis.

Punjab National Bank stock shed over 5 percent after the lender declared its Rs 3,600 crore exposure to Dewan Housing Finance as a fraudulent account.

Gujarat Ambuja Exports share price rose 10 percent as the company board will consider a proposal for sub-division of equity share.

Firstsource Solutions stock price jumped over 6 percent after Rakesh Jhujhnwala raised his stake in the company.

Reliance Industries stock jumped over 3 percent, climbing an all-time high on July 10, hitting a market capitalisation of Rs 11,90,857.13 crore. RIL market cap rose by over Rs 34,000 crore in Friday’s trade.

Yes Bank stock shed over 4 percent after the private lender approved the price band for its follow-on public offer (FPO).

Astra Microwave Products stock was up almost 4 percent after owner of supermarkets chain D-Mart Radhakishan Damani bought 1.03 percent stake in the defence sector player in the June quarter of the financial year 2021.

Tejas Networks stock jumped 5 percent, hitting upper circuit for the third consecutive day, after Kedia Securities, owned by investor and trader Vijay Kedia, acquired a 0.81 percent stake in the company for Rs 3.7 crore through open market transactions.

Technical View

The Nifty formed a Spinning Top pattern on daily charts.

A close observation of the last five sessions suggests that the Nifty is consolidating in a zone of 10,847 – 10,676 levels

A break below 10,676 could trigger a fresh leg of short term downswing with initial targets of 10,480 levels.

In that scenario, the upside target can be around 11,250 levels. “For the time, traders are advised to shift their focus on stock-specific opportunities as the index is clearly in a no-trade zone,” Mazhar Mohammad of said.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.