The market has entered a consolidation phase this week and corrected after Monday’s gains as it displayed range-bound volatility during the day’s trade. Auto and consumer durable sector closed down by 2 to more than 3 per cent as rupee touched a new low of 74.39 per dollar and crude oil price surged by around 1 per cent. The Sensex fell 174 points, or 0.51 per cent, to settle at 34,229.47, and the Nifty 50 Index fell 47 points, or 0.45 per cent, to settle at 10,301.05. The broader market fared better with BSE Mid-cap Index down by just 0.16 per cent and the Small-cap Index falling by 0.45 per cent.
Technical view
Mustafa Nadeem, CEO, Epic Research, said, "A very small trading range was seen with a drop in volatility. So on the daily chart, the range for the Nifty comes to be 10,400 on the upside and 10,240 on the downside. Given a drop in volatility, this range is a point of equilibrium for bulls and bears at this moment. A breakout from this range will further guide the market momentum.
“A breathing rally is expected by a lot of trapped bulls on the upside while bears may continue to chop at any higher levels. So going forward, the Nifty will have to give closing above 10,590 on resuming its uptrend till that point of time we remain cautious and try not to seek bottom fishing at these levels. On the downside, supports are established, for now, at swing low of 10,190. We continue to remain bearish with selling opportunities at higher levels of 10,500–10,520.”
Market view
VK Sharma, head of private client group & capital market strategy, HDFC Securities, said, “Fears that global investors will withdraw their funds from global markets and park in US treasuries is affecting the global markets. Crude oil prices also rose 1 per cent to $84.7 per barrel.
“Rising crude oil prices and higher US bonds yields resulted in weak rupee. It touched a new all-time of 74.35 on Tuesday and the spooked equity investors. Sugar stocks surged on back of lower production from Brazil and high international raw sugar futures prices. Tata Motors stock was hammered 14 per cent as it announced weak global JLR sales numbers and as it announced a two-week shut down of its West Midland plant.
—Ravi Ranjan Prasad
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