Indian benchmark indices flashed red for the second consecutive session on September 20, pulled down by the metal stocks as investors remained cautious ahead of multiple central bank meetings scheduled during the week.
At close, the Sensex was down 524.96 points, or 0.89 percent, at 58,490.93, and the Nifty was down 188.30 points, or 1.07 percent, at 17,396.90.
“Following high volatility and weak global sentiment, the domestic market ended in a bear grip with metal and PSU nanks leading the downward rally,” said Vinod Nair, Head of Research at Geojit Financial Services.
Global markets traded negatively as investors were cautious ahead of a series of meetings by central banks this week. With weak US job data and easing inflation, the Federal Reserve is not expected to hint at a taper plan in the meeting on September 21-22, he said.
The broader market underperformed the benchmarks, as BSE midcap and smallcap indices fell nearly 2 percent each.
Except FMCG, all other sectoral indices ended in the red, with metal index tanking nearly 7 percent.
Stocks & sectors
On the BSE, the metal index shed 6.8 percent and auto, bank, capital goods, oil & gas, power and realty indices fell 1-2 percent. Some buying was seen in FMCG stocks.
Among individual stocks, a volume spike of more than 500 percent was seen in Zee Entertainment, Indian Hotels and PVR.
Long buildup was seen in Indian Hotels, PVR and Godrej Consumer Products, while short buildup was seen in Zee Entertainment, Vodafone Idea and Tata Steel.
As many as 200 stocks, including Dabur, ITC, Larsen & Toubro Infotech and Tech Mahindra, hit a 52-week high on the BSE.
The Nifty formed an inverted bearish hammer kind of candle on daily scale and negated its higher highs-higher lows of the last four sessions.
“Now till the Nifty hold below 17,600 zones… selling pressure for the downside move towards 17,350 and 17,272 zones, while on upside, key hurdle exists at 17,777 levels,” said Chandan Taparia, Vice President, Analyst-Derivatives, Motilal Oswal Financial Services.
Outlook for September 21
Ashis Biswas, Head, Technical Research, CapitalVia Global Research
Correction continued even as the Nifty unsuccessfully tried to hold above 17,500. The market suggests that 17,450-17,500 will be an important support zone for the market to stay positive in the short term. If it is unable to sustain the level, the market may slip further to 17,250-17,300.
Palak Kothari, Research Associate, Choice Broking
On the technical front, the Nifty has confirmed the shooting star as well as formed Bearish Marabozu Candle on four hourly charts, which suggest some profit booking can be seen in the next session.
Moreover, the index faced resistance from 21HMA and gave a closing below it, adding to the weakness.
Stochastic and MACD indicator is showing weakness, with negative crossover on a daily time frame which indicates southward direction in the upcoming session.
At present, the Nifty seems to have resistance at 17,778, while immediate support comes at 17,250 levels, a break can led further downside.
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