Taking Stock: Additional CRR, inflation forecast drags Nifty below 19,550; Sensex down 308 pts
Except for metal and power, all other sectoral indices ended in the red with FMCG and PSU Bank down nearly 1 percent each, while capital goods, healthcare were down 0.5 percent each
After a muted start, the market came under pressure and extended the losses as the day progressed.
The Indian equity market gave a thumbs-down to the outcome of the Reserve Bank of India's (RBI) policy meeting on August 10, which decided to maintain an additional 10 percent of Incremental Cash Reserve Ratio (ICRR) for banks, and upward revision of inflation forecast also dampened investor sentiments.
At close, the Sensex was down 307.63 points or 0.47 percent at 65,688.18, and the Nifty was down 89.40 points or 0.46 percent at 19,543.10.
After a muted start, the market came under pressure and extended the losses as the day progressed.
Asian Paints, ITC, Kotak Mahindra Bank, Britannia Industries and Apollo Hospitals were among the top losers on the Nifty, while Adani Enterprises, IndusInd Bank, Adani Ports, Titan Company and ONGC were top gainers.
Except for metal and power, all other sectoral indices ended in the red with FMCG and PSU Bank down nearly 1 percent each, while capital goods, healthcare were down 0.5 percent each.
The BSE midcap and smallcap indices also ended the day marginally lower.
| BIGGEST GAINER | PRICES | CHANGE | CHANGE% |
|---|---|---|---|
| Adani Enterpris | 2,552.40 | 45.30 | +1.81% |
| BIGGEST LOSER | PRICES | CHANGE | CHANGE% |
|---|---|---|---|
| Asian Paints | 3,237.90 | -93.10 | -2.79% |
| BEST SECTOR | PRICES | CHANGE | CHANGE% |
|---|---|---|---|
| Nifty Metal | 6723.30 | 45.45 | +0.68% |
| WORST SECTOR | PRICES | CHANGE | CHANGE% |
|---|---|---|---|
| Nifty FMCG | 51728.70 | -477.50 | -0.91% |
A long build-up was seen in Zee Entertainment Enterprises, Max Financial Services and Trent, while a short build-up was seen in Granules India, Mahanagar Gas and Pidilite Industries.
Among individual stocks, a volume spike of more than 400 percent was seen in Can Fin Homes, Samvardhana Motherson International and Zee Entertainment Enterprises.
More than 200 stocks touched their 52-week high on the BSE, including JSW Steel, Zydus Lifesciences, Thomas Cook, Ircon International, Force Motors, Dr. Reddy's Laboratories, Bharat Forge, Religare Enterprises, Oil and Natural Gas Corporation and Ashok Leyland.
Outlook for August 11
Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas:
The Nifty opened on a flat note and has witnessed yet another extremely volatile day of trade today. It closed in the negative down ~80 points. On the daily charts, we can observe that the Nifty has faced resistance at the falling trend line, and the 20-day moving average is placed in the zone 19630 – 19670. The Nifty was unable to witness follow-through buying and traded with the range 19645 – 19467 of the previous trading session. Until the Nifty trades below the zone 19630 – 19670, we can expect the pressure to persist. The momentum set up on the daily and hourly time frame charts are providing divergent signals which can lead to a consolidation in the short term. Overall, the trend is still negative, and we expect the Nifty to target levels of 19100 from a short-term perspective.
Bank Nifty witnessed selling pressure from the key hourly moving averages placed in the range of 45000 – 45100. The daily and hourly momentum indicator has a negative crossover which is a sell signal. The Bank Nifty has decisively closed below the 40-day moving average which is a sign of weakness. Thus both price and momentum indicators is suggesting a further downside over the next few trading sessions. On the downside 44000 is the short-term target.
Shrikant Chouhan, Head of Research (Retail), Kotak Securities
While RBI's status quo on interest rate didn't come as a surprise, the MPC's cautious tone and no signal of any rate cut by this year-end hurt the market sentiment. Inflation continues to be the key concern area and the RBI remaining watchful of the developments in key global economies indicates that investors' appetite for equities will be measured in the near to medium term. Also, investors kept a low profile ahead of the US inflation data to be released later today, and the domestic CPI inflation and IIP numbers to be released on Friday.
Technically, the Nifty has formed an inside body candle on daily charts which indicates the continuation of a range bound activity in the near future. A fresh uptrend is possible only after the dismissal of 19620, above which the index could move till 19700-19725. On the flip side, below 19500, selling pressure is likely to accelerate and could slip till 19400-19375.
SOURCE - MONEY CONTROL
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