TAKING STOCK | SENSEX FALLS 380 PTS, NIFTY BARELY HOLDS 22,300 LEVEL; REAL ESTATE, METAL STOCKS BLEED

India's benchmark indices Sensex and Nifty 50 closed lower on May 7 as selling prevailed across the board amid disappointing Q4 earnings, thus causing a dent in market confidence near record highs.

On Tuesday, Sensex closed 383 points (0.5%) lower at 73,511.85, while the Nifty 50 fell 141 points (0.6%) to 22,301.50. Of the total stocks, 840 advanced, 2,441 declined, and 82 remained unchanged.

This downturn was compounded by ongoing uninspiring Q4 earnings, with Kotak Securities noting limited positive surprises, leading to minimal earnings upgrades.

Top gainers among sectors included Nifty FMCG Index, up 2%, and Nifty IT, up 0.77%. On the downside, Nifty realty and metals fell 3.5% and 2.4% respectively. Other losers were Nifty PSU Bank Index (down 2.3%), Nifty Healthcare (down 2%), and Nifty Auto (down 1.8%).

Outlook for May 8

Prashanth Tapse, Senior VP (Research), Mehta Equities

Profit taking in the markets continued as investors wary of higher valuations trimmed their exposure in banking, metals, oil & gas, realty and power shares. With the US Fed delaying its rate cut decision and inflation still above the comfort level, investors would be risk averse and mostly resort to selective bullish bets.

Vinod Nair, Head of Research, Geojit Financial Services

Despite positive global cues, the domestic market continued to consolidate. The domestic market is witnessing profit booking due to various factors, including a low turnout in the ongoing election and premium valuations. However, FMCG remained the biggest sectoral gainer in today’s trading session, driven by expectations of improving volume growth from rural areas aided by favourable monsoon expectations.

Hrishikesh Yedve, analyst at Asit C. Mehta Investment Interrmediates

Domestic benchmark indices opened higher on Tuesday, aided by favourable global clues. However, after some initial jitters, the market saw massive profit booking, with the Volatility Index (India VIX) jumping by about 6%. Later in the day, volatility decreased, and the index closed down at 22,302. Technically, the index created a bearish engulfing candle last week, indicating weakness. The index settled below, the low of the bearish engulfing candle, and the 34-Day Exponential Moving Average (DEMA) support, suggesting further pessimism. On the downside, the index will find solid support at 22,100-22,000 levels. On the upside, the index will continue to face stiff resistance at 22,800. Overall, we expect the index to consolidate in the 22,000-22,800 range in the short term. In the immediate term, 22,100 and 22,000 will serve as solid support levels, while 22,500 and 22,800 will operate as obstacles to the index.

The Bank Nifty opened on a bullish note, but due to heavy selling pressure, the index concluded on a negative note at 48,285. Technically, on a weekly basis, the index formed a shooting star candlestick formation near its all-time high, indicating strong resistance near 49,975. Furthermore, the index broke the previous week's low of 48,342.7. As long as the index remains below 48,340, weakness could extend to 48000-47,700. In the short term, 48,000 and 47,700 will serve as support points, while 49,000 and 50,000 will operate as resistance.

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2024-05-07T10:51:48Z dg43tfdfdgfd