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Sensex closes with deep cuts, Nifty below 16150 could fall to 15850; check support, resistance levels

BSE Sensex and NSE Nifty 50 settled nearly 2 per cent lower on Friday tracking losses in global peers

Sensex, Nifty, stock market
Inflation, commodity price movement and Central bank measures are critical factors for market performance over the near to medium term. Image: Pixabay

BSE Sensex and NSE Nifty 50 settled nearly 2 per cent lower on Friday tracking losses in global peers. BSE Sensex tanked 1,017 points or1.84 per cent to settle at 54,303, while NSE Nifty 50 index finished at 16,202, down 276 points or 1.68 per cent. Index heavyweights such as Reliance Industries Ltd (RIL), Housing Development Finance Corporation (HDFC), Infosys, HDFC Bank, Kotak Mahindra Bank, ICICI Bank, among others contributed the most to the indices’ loss. In the broader market, S&P BSE Midcap index lost 0.6 per cent or 145 points to end at 22,490, while S&P BSE Smallcap index declined 0.7 per cent or 182 points to shut shop at 25,857. On the sectoral front, Nifty Bank index lost 1.7 per cent to settle at 34,484. India Vix, the volatility index, was up 2.3 per cent to finish at 19.6 levels.

Deepak Jasani, Head of Retail Research, HDFC Securities

After a streak of 3 weekly gains, Nifty ended lower for the week by 2.31%. Bounces remain shortlived as traders and investors keep selling into them. The US Fed meet on June 14-15 will be next big event affecting the sentiments. Nifty has closed below the gap support of 16204. Now 16026 will be the next support while 16356 will be the resistance.

Ajit Mishra, VP – Research, Religare Broking

Markets will continue to take cues from the global markets in absence of any major domestic event. First, participants will react to the US inflation data and upcoming macroeconomic data (IIP, CPI & WPI) will also be in focus. While the index is gradually inching lower, a mixed trend on the sectoral front is offering opportunities on both sides so traders should align their positions accordingly.

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

Indian equity markets ended the week on a negative note. Major key indices and sectoral indices declined during the week. Amid persistent inflation, Central Banks continued with monetary policy tightening. RBI hiked repo rate by 50 bps to 4.9%. European Central Banks decided to end net asset purchases under its asset purchase programme and also signaled towards rate increase in its July monetary policy meeting. Crude oil prices inched up with Brent crude trading above $120 per barrel mark. The US 10-year treasury yield again moved above 3%. FII’s continued with their selling of Indian equities. Monsoon progress needs to watched out for as a good monsoon will calm concerns about further food inflation. However, inflation, commodity price movement and Central bank measures are critical factors for market performance over the near to medium term.

Amol Athawale, Deputy Vice President – Technical Research, Kotak Securities

The pessimistic mood across several global markets had a rub off effect on local equities as nagging issues like rising interest rate scenario, higher inflation levels and persistent FII selling spooked markets. Bigger concerns of stagnating growth and its effect on corporate earnings going ahead is also making investors nervous, resulting in periodic selloffs. Technically, after a long time, the Nifty closed below 20 day SMA and, on intraday charts, it is consistently forming a lower top formation which is largely negative. On weekly charts the index has formed a long bearish candle indicating further downtrend from the current levels. If the Nifty falls below 16150, it could slip up to 16000-15850 levels. On the flip side, a fresh pullback rally is possible only after the 16300 breakout. Above which, the index could move up to 16400-16500.

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