Indian equity indices traded Monday’s session on a lower note as investor sentiments were jittered by the Jane Street Group scandal. The NSE Nifty 50 slipped over 0.5%, but held the important 25,000 level, while the BSE Sensex fell more than 400 points.
In line with the overall bearish markets, Bank Nifty was down 100 points to trade around 56,700. However, the small and midcap traded outperformed the key indices. The Nifty Midcap 100 surged over 300 points or 0.5% to trade around 58,900.
“Technically speaking, Friday’s candle had a long upper shadow and a close near the lows, and that’s weak behaviour. The area that lies between 25,000 and 25,127 is critical support from hereon, but bulls will have to both defend support and record at least one daily close above 25,340 to reverse the ongoing dip,” said Akshay Chinchalkar, Head of Research at Axis Securities.
Nifty has been exhibiting a weak trend, weighed mainly by the weakness in the IT stocks, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. This weakness may persist, particularly since the FIIs were big sellers in the cash market last Friday. “It is important to note that banking and financials are outperforming even in this weak market.”
This trend may persist. The market has already discounted the NIM compression for banking stocks expected in Q1 results. Therefore, dips in banking stocks will provide opportunities to buy, said Vijayakumar.
“The market has closed below a short-term rising channel, so under 25,100, we might see a test of the 24,900 to 25,000 zone, where another channel is currently offering support,” Chinchalkar added.
Let’s take a look at the key factors to watch out for today’s trading session
Early gainers and laggards
In early trade, among the Nifty 50, the key laggards in the Nifty 50 pack included Infosys, Bajaj Finance, Tech Mahindra, Bharti Airtel, and HCL Technologies. On the flip side, top gainers at this hour were IndusInd Bank, Sun Pharma, Coal India, Grasim Industries, and ONGC, among other stocks.
Major movers on Monday
The stocks that remained under pressure included Infosys, Bharti Airtel, Bajaj Finance, HDFC Bank, and L&T, which were the major movers in the morning trade.
Tariffs on EU and Mexico
U.S. President Donald Trump, on Saturday, said the U.S. will impose 30% tariffs on the European Union and Mexico starting August 01. Officials from the EU and Mexico expressed their plans to continue discussions with the Trump administration this month in hopes of reaching an agreement on a reduced rate.