Bears back on D-St; auto, metal stocks drag Nifty below 11,800

The benchmark indices started the week in the red, slipping a percent as selling was seen across sectors led by auto, metals, energy and banks. The Sensex closed 540 points, or 1.33 percent, lower at 40,145.50 and the Nifty fell 162.60 points or 1.36 percent to 11,767.80.

“Indian markets are taking a correction from the recent rally, which has factored in a lot about an uptrend in earnings growth due to positive Q2 results. Indian indices are expected to remain weak in the near term and will be driven by the trend of ongoing Q2 results and developments in the US. A big correction is unlikely, with 11,500 as a strong support for the Nifty50,” said Vinod Nair, Head of Research at Geojit Financial Services.

Led by auto, metal and energy, profit-taking was witnessed in all the sectors.

Broader markets performed in-line with the benchmarks. The S&P BSE midcap index slipped 1.77 percent while the smallcap index closed 0.88 percent down.

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The top losers on the Nifty were Hero MotoCorp, Bajaj Auto, Hindalco, M&M and JSW Steel. HDFC Life, Nestle, Kotak Mahindra, IndusInd Bank and L&T were the top gainers.

Also Read – Gainers & Losers: 10 stocks that moved the most on October 26

Stocks & sectors

Sectorally, the BSE Metal was down 3.4 percent. The auto index shed more than 3 percent and the realty index plunged 2 percent.

A volume spike of more than 100 percent was seen in Mindtree, PNB and NALCO.

Short build-up was seen Coforge, Mindtree and Voltas while long build-up was seen in HDFC and Kotak Mahindra Bank.

Ceat, Jet Airways, JK Cement and MCX India were among more than 100 stocks on the BSE to hit a fresh 52-week high.

Technical view

The Nifty formed a bearish belt hold candle, which indicated that the bears dominated the market for the most part of the session.

Mechanical indicator RSI has given a decisive negative crossover on the daily scale, which doesn’t bode well for the bulls.

“Now till it doesn’t surpass the above immediate hurdle of 11,850 zones, more weakness can be seen towards the next key support of 11,666 while on the upside, resistances are shifting lower at 11,950 from 12,020 marks,” Chandan Taparia of Motilal Oswal Financial Services told .