Nifty is approaching its support zone of 9100-9000 levels, however, any violation of this will cause further weakness towards 8800 levels
The headline indices BSE Sensex and Nifty 50 ended nearly 1 per cent lower on Tuesday led by sell-off public sector banks during the last hour of the trade. The 30-share index Sensex declined 262 points or 0.83 per cent to settle at 31,453.51 while NSE’s Nifty 50 ended at 9,205.60, down 88 points or 0.95 per cent. Due to a sell-off, SBI share price hit a fresh 52-week low in the intraday. Nifty Bank index too witnessed selling pressure during the final hour of the trade. It fell 951 points from its day’s high level. The top Sensex gainers were M&M, Power Grid, ONGC and Reliance Industries (RIL).
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What led to last hour sell-off in Sensex, Nifty
Banks, financial stocks underperform: Banking and financial stocks largely underperformed in today’s trade. This underperformance will continue to persist. “The daily price action has formed a sizable bearish candle forming lower High-Low compared to previous session indicating negative bias. With current close, Nifty is approaching its support zone of 9100-9000 levels, however, any violation of this will cause further weakness towards 8800 levels,” Rajesh Palviya, Head Technical & Derivatives, Axis Securities told Financial Express Online.
NBFCs, bank stocks fell: Despite global markets trading strongly in green, our markets failed to maintain the early lead. “In fact in the latter half the selling augmented across the board, mainly in financial stocks. Some of the NBFC names along with marquee heavyweight banking stocks started falling ferociously. This was the main reason why the Nifty tumbled in the last couple of hours of trade,” Sameet Chavan, Chief Analyst Technical and Derivatives, Angel Broking Ltd, said.
Market outlook: Domestic benchmark indices Sensex and Nifty rallied 30 per cent from their respective lows hit in March. “Nifty is likely to trade in the range of 8800-9500 in the short term, although one would be better off looking at opportunities outside the index,” Rajesh Agarwal, Head of Research, AUM Capital Market told Financial Express Online. “In the very short term, market would be keenly tracking the tensions between China and US apart from which government stimulus, GDP numbers, crude, currency fluctuations and any announcement towards a possible cure for the pandemic would be something to watch out for,” Rajesh Agarwal added.
In the broader market, both S&P BSE Midcap and S&P BSE Smallcap indices settled nearly 1 per cent down to 11,391 and 10,650 levels, respectively. SBI, Bajaj Finance, Asian Paint and Axis Bank were among the top Sensex laggards. Among 11 Nifty sectoral indices, Nifty PSU Bank fell the most in today’s trade, dragged by SBI, Bank of Baroda and J&K Bank. Similarly, Nifty Realty index finished nearly 3 per cent lower weighed by The Phoenix Mills, Sobha and Indiabulls Real Estate.