BSE Sensex and Nifty 50 halted the winning spree on Wednesday as bears made a comeback on Dalal-Street.
According to the analysts, Indian share market is overvalued from the short- term perspective while at high levels, it is vulnerable to a correction.
BSE Sensex and Nifty 50 halted the winning spree on Wednesday as bears made a comeback on Dalal-Street. S&P BSE Sensex broke the 10-day gaining run and settled at 48,174 levels. While the broader Nifty 50 index snapped the three-day gaining streak after a volatile second half of today’s session to end at 14,133. During intraday, Sensex scaled fresh record high of 48,616 and Nifty 50 index rose to 14,244 levels. Index heavyweights such as Reliance Industries Ltd (RIL), ITC, Infosys, Tata Consultancy Services (TCS) and Hindustan Unilever Ltd (HUL) contributed the most to the indices’ loss today. The broader markets ended flat on Wednesday. S&P BSE MidCap index ended 0.4 per cent up at 18,749 level. However, the S&P BSE SmallCap index finished at 18,614, down 0.14 per cent or 27 points.
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities
“Nifty trades around the 14100; midcap stocks have outperformed in the recent past and select stocks continue to remain in momentum. We believe within the structural up-move, interim correction phase is expected to play out. Expect volatility to increase significantly in the near term. There has been a shift in positions/interest from frontline stocks to the midcap space which usually in followed by a correction. FMCG stocks look attractive while Metals and Banking are expected to witness volatility. Traders are advised to keep leverage in control while investors can wait for a meaningful dip to buy aggressively.”
“Market is experiencing volatility due to weak Asian market and profit booking owing to rich valuation. Banking stocks are supportive, led by good loan growth data for Q3FY21, announced by key private banks. In the near-term, trend of the broad market will depend a lot on FII inflows while stock specific actions will be based on Q3 result, which is about to pick up.”
“A volatile session of trade today as the situation in EU tempered optimism with pivotal like RIL & ITC giving way. However, improvement in High-Frequency Indicators and the Impending Vaccination has ensured brisk FII flows into India even as other Emerging Markets witnessed outflows”
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments
“14250 worked as a stiff resistance and we did see a sharp fall in the market. Although we did rebound from the lows, I would advise caution as sharp movements cannot be ruled out. Hence strict stops should be maintained and traders should initiate long positions only on dips or corrections.”
Rohit Singre, Senior Technical Analyst at LKP Securities
“Index opened a day with gap up but failed to hold the gains and saw profit booking and closed a day on a negative note at 14134 with loss of half a per cent and formed hanging man candle pattern which is bearish reversal candle pattern by nature. Now going ahead 14040 will be good support any break below said levels can show some more cuts in the index and on the higher side 14180-14230 zone will be strong resistance further upside-only possible if index managed to sustain above-said levels.”