The Nifty took a pause today to get a breather after the sharp gains over the last couple of sessions. The index consolidated in a narrow range above the key Fibonacci level and ultimately formed a Doji on the daily chart.
Indian equity market ended flat on September 24, mostly on profit-booking, amid uninspiring global cues, while investors assessed the impact of tax rate cut on different stocks and sectors after a two-day blockbuster rally.
The market took a pause to get a breather after solid gains in the last two sessions which saw the Sensex and the Nifty surging over 8 percent, making investors richer by over Rs 10 lakh crore.
Participants said, while the recent announcements by the government are long-term positives, some profit-booking was expected as the market is trading near peak valuations.
Analysts are of the view that a healthy consolidation will offer fresh buying opportunities.
"The consolidation is healthy for the larger uptrend and will provide fresh buying opportunities. The consolidation, once matured, will make way for the next leg of the rally,' said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan by BNP Paribas.
Other than the RBI's monetary policy outcome, investors will now read the quarterly earnings of the corporates that will start coming in from early October to get further cues.
"Indian benchmark indices are trading near peak valuations and sustainability at this level is essential. Therefore, investors would closely monitor the movement in the coming sessions, as volatility would remain high. From medium to long-term perspective, the outcome of the RBI monetary policy and revival in corporate earnings will be crucial, as it is likely to dictate the trend in the market," said Ajit Mishra Vice President, Research, Religare Broking.
The Sensex index added just 7 points to its previous close to end at 39,097.14, with 15 stocks up and 15 down. On the other hand, Nifty lost 12 points to settle at 11,588.20, with 22 stocks in the green and 28 in the red.
Infosys, Reliance Industries, Tech Mahindra, Tata Motors and Maruti Suzuki were among the top gainers, while State Bank of India, Axis Bank, Larsen & Toubro, Hero Motocorp and Asian Paints finished as the top losers in the Sensex kitty of stocks.
Midcaps and smallcaps closed mixed. While the BSE Midcap index slipped 0.51 percent, the Smallcap index settled with a gain of 0.17 percent.
BSE IT, with a gain of 2.31 percent, emerged as the top gainer among the sectoral indices, followed by BSE Teck (up 1.98 percent) and BSE Energy (up 1.65 percent).
On the flip side, BSE Capital Goods (down 1.80 percent), BSE Metal (down 1.70 percent) and BSE Bankex (down 1.25 percent) closed as the top losers.
Top news of the day:
The United Kingdom’s Supreme Court ruled that Prime Minister Boris Johnson acted unlawfully when he advised Queen Elizabeth to suspend parliament just weeks before Brexit and that therefore the legislature had not been prorogued, reported Reuters.
As many as 17 Indian companies, including Infosys, TCS and HDFC, have been named in the list of World's Best Regarded Companies compiled by Forbes.
China's central bank governor said its monetary policy will stay "stable and healthy", suggesting Beijing has no plans to join the United States and Europe in cutting interest rates to stimulate economic growth amid a tariff war with Washington.
The Supreme Court has asked the Centre to apprise it within three weeks about the time-frame needed to come up with guidelines to curb misuse of social media in the country.
Prime Minister Narendra Modi held a series of bilateral meetings with several world leaders on the sidelines of the UN General Assembly session, including with German Chancellor Angela Merkel, Italian Prime Minister Giuseppe Conte and Emir of Qatar Sheikh Tamim bin Hamad.
Stocks in news:
Shares of CG Power and Industrial Solutions remained locked at 5 percent upper circuit at Rs 14.66 on the BSE on after the company got an extension to hold its annual general meeting (AGM).
Axis Bank shares slipped 3.13 percent to end at Rs 704.30 even after media reports said that the private lender was likely to see a cumulative capital enhancement of more than Rs 16,500 crore.
Breaking the losing spree of the last six consecutive sessions, shares of Zee Entertainment Enterprises settled 2.65 percent higher at Rs 279.30, a day after lenders to the Essel group sold pledged promoters’ shares of the company for over Rs 200 crore.
Shares of Reliance Industries jumped 3.22 percent to Rs 1,278.55 after foreign brokerage house Morgan Stanley maintained overweight rating with a target at Rs 1,469 per share.
Snapping the losing streak of last five consecutive sessions, shares of Dewan Housing Finance Corporation (DHFL) closed with a strong gain of 7.16 percent at Rs 44.90, a day ahead of the company's meeting where the draft resolution plan shall be discussed.
Yes Bank shares settled with a gain of 1.26 percent at Rs 56.05 after the company said the promoter group of the company prepaid a substantial portion of its outstanding non-convertible debentures (NCDs).
Global update:
European shares rose, following their worst day in over a month after Washington said the United States and China would resume trade talks. Britain's pound was laying low before the next act in the Brexit drama, Reuters reported.
Asian markets logged mild gains. China's Shanghai Composite Index closed 0.28 percent up at 2,985.34, while Korea's Kospi gained 0.45 percent to end at 2,101.04. Japan's Nikkei ended almost flat at 22,098.84.
Technical view:
The Nifty took a pause today to get a breather after the sharp gains over the last couple of sessions. The index consolidated in a narrow range above the key Fibonacci level and ultimately formed a Doji on the daily chart.
"In terms of the bar patterns, the index has formed an Inside bar today. Thus the Monday’s extremes - 11,471 and 11,695 - will now be the key levels in either direction. On the higher side, the 78.6 percent retracement mark at 11,790 will be the key short term target with the potential to stretch higher," said Ratnaparkhi of Sharekhan by BNP Paribas.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
