Sensex, Nifty fall for 2nd straight day as metal stocks tumble; are bears coming back to haunt D-St?

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January 18, 2021 4:19 PM

Markets traded weak for the most part of the day and closed in the red as fears of price cuts led to profit booking in metal stocks in the wake of rising coking coal prices.

sensex, niftyDomestic equities witnessed pullback for second consecutive day as weak global cues continued to weigh on investors’ sentiments. Image: Reuters

BSE Sensex and Nifty 50 ended near day’s lows on Monday, following weak global cues. BSE Sensex fell 470 points or 0.96 per cent to 48,564. while the broader Nifty 50 index plunged 152 points or 1.06 per cent to end at 14,281. Reliance Industries Ltd (RIL) shares were the top performers and jumped 2.37 per cent to end at Rs 1,983.50 apiece. Titan Company, HDFC Bank and ITC were other Sensex gainers. On the flip side, ONGC shares tumbled over 4.5 per cent followed by losses in Sun Pharma, IndusInd Bank and Power Grid Corporation of India. Market breadth favoured bears as 2,089 stocks declined while 939 scrips rose. The Nifty Metal index plunged over 4 per cent. European equity markets struggled for direction today as strong economic data from China competed with concerns over a double-dip recession in the UK and the eurozone.

S Ranganathan, Head of Research at LKP Securities

“Markets traded weak for the most part of the day and closed in the red as fears of price cuts led to profit booking in metal stocks in the wake of rising coking coal prices. Afternoon trade witnessed selling in Oil & Gas stocks too causing the market breadth to deteriorate”

Binod Modi, Head Strategy at Reliance Securities

Domestic equities witnessed pullback for second consecutive day as weak global cues continued to weigh on investors’ sentiments. Barring FMCG, most of the key sectoral indices witnessed sharp correction and volatility index soared over 5% today before recovering from top. A sharp rebound in RIL along with buying interest in HDFC Bank after strong 3Q numbers offered support to benchmark Nifty index. While underlying strength of markets remains intact considering rebound in key economic data, sustained growth in corporate earnings in 3QFY21 with upbeat managements’ commentaries and commencement of vaccination process. Additionally, favourable monetary policies of global central bankers, weak dollar and large fiscal stimulus in the USA are expected to ensure sustain FPIs flow in domestic equities. Further, as union budget is just two weeks away, rotational trading might be visible in the market.

Ashis Biswas, head of Technical research at CapitalVia Global Research Limited

“The market has got choppy ahead of the upcoming union budget and due to weakness in an expensive global market. A good part of the economic gains is well factored in by the upside of the last 11 weeks. A short-term correction was being anticipated for some time, it will be welcome for the market on a long-term basis”.

Vinod Nair, Head of Research at Geojit Financial Services

“The market has got choppy ahead of the upcoming union budget and due to weakness in an expensive global market. A good part of the economic gains is well factored in by the upside of the last 11 weeks. A short-term correction was being anticipated for some time, it will be welcome for the market on a long-term basis”.

Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments

We have broken the crucial support of 14350 and should ideally be headed further south to levels closer to 14150 and then 14000. Markets have become volatile and strict stops must be placed on all trades. 14500 has become a resistance zone and any rally up can be utilized to short the Nifty for lower targets.

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