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Nifty, Sensex snap 4-day winning streak to end in red; ‘volatility to continue, accumulate stocks on dips’

Indian benchmark indices 4-day winning streak and logged their first drop in five sessions on Wednesday, in line with tepid global markets as inflation and recession fears continued to hurt sentiment.

stock markets, bse sensex, nse nifty 50, bank nifty
Volatility may remain at elevated levels in the coming sessions too and investors should look for accumulating selective stocks in dips rather than buying in one shot.

Indian benchmark indices 4-day winning streak and logged their first drop in five sessions on Wednesday, in line with tepid global markets as inflation and recession fears continued to hurt sentiment. The Sensex opened gap-down and touched the day’s lowest level at 52,612 before making some recovery and closing at 53,027, down 150 points or 0.28%. The NSE Nifty 50 index fell 51 points or 0.32% to settle at 15,799. Selling pressure was witnessed in Banking, IT and FMCG counters while some buying was witnessed in selected Auto, Metal and Realty names. Volatility may remain at elevated levels in the coming sessions too and investors should look for accumulating selective stocks in dips rather than buying in one shot, according to analysts.

Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities

“June series witnessed significant volatility and continues to trade with a negative bias below 15930. Medium term outlook remains negative while for the short term we believe technical bounce back is possible on crossing of resistance levels. On the higher side 16300-16500 is possible. Energy and select midcap stocks remain attractive. Banking stocks trades here criticial support levels. Metals continue to remain weak with high volatility.”

Palak Kothari, Senior Technical Analyst, Choice Broking

“On technical front, the Nifty has been trading with Higher Lows & Lower Lows which is negative formation suggesting weakness for an upcoming session. Nifty has been facing resistance from 21 DMA and given closing below the same suggested weakness for next trading session. The momentum indicators Stochastic & MACD are trading with a negative crossover on an hourly chart which suggest southward journey in the counter. The Nifty may find support around 15600 levels while on the upside 16000 may act as an immediate hurdle crossing above the same can show upside rally. On the other hand, Bank nifty has support at 32600 levels while resistance at 34000 levels. Overall, Index can show downside moment breaching below 15650 level can show southward journey with a resistance of 16000.”

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

“Selling pressure intensified in late trades as investors dumped banking, telecom & IT stocks, which dragged the Sensex below the psychological 53000 mark. With fundamentals remaining weak, the upward bias is unlikely to sustain for long. As the European markets faltered in their morning trades, all the modest gains got erased in late selling pressure. With crude oil prices once again rising and the rupee continuing to struggle against the dollar, investors are playing safe and trimming their exposure to equities at regular intervals. Technically, the Nifty is consistently taking support near 15700 and at the same time witnessed profit booking near 15900 resistance level. We are of the view that 15700 would act as a sacrosanct support zone. Above which, the index will move up to 15900. Further upside may also continue which could lift the index up to 15975. However, if the index trades below 15700, it would slip till 15600-15550.”

Ajit Mishra, VP – Research, Religare Broking Ltd

“Markets traded volatile for yet another session and lost nearly half a percent. Weak global cues were weighing on the sentiment in early trade which triggered a gap-down start however buying in select index majors trimmed the losses as the day progressed. Markets will react to the US GDP data in early trades and then the focus would shift to the monthly derivatives expiry. While the Nifty has been hovering around its crucial hurdle of 15,900, the recent decline in the banking index is pointing towards more pain ahead. Participants should maintain caution and focus more on overnight risk management.”

Deepak Jasani, Head of Retail Research, HDFC Securities

“Nifty ended in the negative on June 29 after two days of gains as the late morning rally after a gap down open fizzled out towards the end of the session. At close, Nifty was down 0.32% or 51.1 points at 15799.1. Volumes on the NSE were the highest since June 17. Despite the fall, Indian markets were among the best performers in the Asian region. Global stock markets slipped for the second straight day on Wednesday on growing fears that policymakers bent on dampening inflation will tip their economies into recession. Nifty has shown signs of rising from the opening low levels over the past few sessions. However, it is not able to build on the gains in the session. Nifty could remain in the 15638-15927 band over the next few sessions.”

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