Sensex ends 2-day losing streak, mid-, smallcaps underperform; here’s what analysts make of today’s trade

The nifty index closed below 50-Days SMA and a falling trendline, which suggests a downside move for the near term, said an analyst

The swing continued throughout the trading session with the BSE Sensex and Nifty 50 moving between gains and losses in Friday’s range-bound trade. The 30-share Sensex ended 42 points or 0.09 per cent up at 48,732, while the broader Nifty 50 index breached 14,700 on the downside and closed at 14,677.80 level, down 18.70 points or 0.13 per cent. The broader market, mid-caps and small-caps, underperformed the benchmarks, as their sectoral indices on BSE closed 1.14 per cent and 1.18 per cent lower. The market breadth was negative as 1,689 stocks declined while 1,401 scrips advanced. A total of 150 shares remained unchanged. This week, headline indices ended one per cent lower due to slowdown in the vaccination drive amid supply crunch.

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Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities

Nifty-50 is down by 1% this week as markets are worried about risks from rising inflation globally and extension of Covid-19 restrictions in various states locally. After seeing unprecedented up move since the start of the year the BSE Metal Index fell by 4% this week. Amongst sectors the BSE Capital Goods Index is by 4% followed by BSE utilities which is up by 2.7%. PSU stocks were major gainers this week led by names like Coal India, IOC, Power Grid and NTPC. The BSE PSU Index was up 3% this week. The staggered state level restrictions rather than a nationwide lockdown is limiting the impact relative to last year. The stable 10 Year G-Sec Yield and Indian currency is also helping Indian markets sustain even though we are seeing the highest spread of the pandemic.

Rohit Singre, Senior Technical Analyst at LKP Securities

Index closed a week at 14678 with loss of nearly one per cent and formed a dark cloud cover sort of candle pattern on weekly chart which is bearish reversal candle by nature. Supports are still placed at 14600-14500 zone holding above said levels structure mildly bullish and we may see some extension in current pull back towards strong hurdle zone of 14800-14950 zone where one can lock in their profits.

Shibani Kurian, Senior EVP & Head- Equity Research, Kotak Mahindra Asset Management Company

Indian equity markets remained largely range bound over the last week. The Covid situation in India is no doubt grim and hence the health issue is something that could keep markets volatile in the near term. Economic activity has slowed down significantly in month of May with many of the high frequency indicators slowing down to level of activities as last seen in month of September 2020. The pace of vaccinations has come down in India over the past few days due to various supply issue but this is expected to pick up by May end. Going forward, market will likely track the pace of vaccinations, trajectory of active cases curve and management commentary of companies. Roll-back of localised lockdown and trend of inflation in many global commodities like crude oil and steel will be other key factors to watch-out by investors.”

Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing sharp weakness on Wednesday Nifty shifted into a consolidation on Friday and closed the day lower by 18 points. A small negative candle was formed on the daily chart with lower shadow on Friday. This pattern was formed beside the long bear candle of Wednesday. This consolidation movement indicate a lack of selling enthusiasm in the market after a short weakness of few sessions. This pattern could eventually result in bulls to making comeback from the lower levels. Nifty on the weekly chart, formed a negative candle at the highs, which signal an inability of bulls to sustain the highs. After the upside breakout of down sloping trend line resistance in the previous week, Nifty has slipped into weakness on the weekly chart and is now placed at the previous upside breakout area of around 14650-14700 levels. The short term trend of Nifty is choppy with weak bias. The present market action signal chances of an upside bounce in the coming sessions. The confirmation of higher bottom at 14591 (Friday’s Low) is expected to pull the market on upside. The next upper levels to be watched around 14900-15000 in the next one week. Immediate support is placed at 14590.

Sumeet Bagadia, Executive Director, Choice Broking

Technically, the nifty index has closed below 50-Days SMA and a falling trendline, which suggests a downside move for the near term. Moreover, an oscillator Stochastic also showed negative crossover on the daily charts, supporting the bearish move for the upcoming sessions. At present, the Index has immediate support at 14600 levels while on the upside, 14900 acts as a crucial resistance zone.

Rohit Singre, Senior Technical Analyst at LKP Securities

The market continues to witness a lack of momentum and stayed in the range between 14600 to 14750. As of now, the short-term technical condition of the market appears like a sideways correction is in the process. While it is subject to further price action evolution, It is prudent to wait for a decisive breakout above 14800 and technical factors to improve before going long in the market. The traders to refrain from building a fresh buying position until further improvement is seen and breakout above 14800.