Sensex, Nifty fall on sell-off in pharma stocks, weak global cues; Nifty fails to cross 15,900 for 3rd day

Analysts say Nifty index is struggling in a range of 15700-15900 and either side breakout will decide the further direction. Image: Reuters

BSE Sensex and Nifty 50 ended with losses for the second consecutive day on Tuesday, following weak European markets, coupled with sell-off in Chinese tech giants, which tumbled up to 9 per cent, dampening investor sentiment. Moreover, market participants remained on edge ahead of the US Federal Reserve’s two-day monetary policy meeting that starts later in the day. BSE Sensex fell 273.51 points to end at 52,578.76, while the Nifty 50 index settled at 15,746.45. Market breadth remained negative as 1,668 stocks declined, while 1,594 scrips advanced. Broader markets also performed in line with equity benchmarks. BSE MidCap index fell 0.67 per cent or 155 points, while BSE SmallCap index was down 30 points. India VIX, the volatility index, jumped 6.28 per cent to settle at 13.23 levels.

Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities

The market failed to surpass the level of 15900 for the third consecutive day, which triggered bull liquidation below the level of 15750. During the day, Nifty fell to 15700 level where it has the support of huge Put writing. The market corrected mainly due to consistent and aggressive selling from FIIs in other Asian markets, which also weighed on the domestic market sentiment. Weakness in Dr Reddy’s resulted in a massive liquidation in the shares of other pharmaceutical companies, dragging down the Nifty Pharma index by more than 4 per cent during the day, which is the biggest intraday fall since December 2020. On the other hand, the Nifty Metal index closed in the positive territory for the 4th consecutive day. The market undertone is expected to be range bound as we are approaching the supports of the lower boundary (15650/15600). On the higher side, 15810 and 15900 would be resistance levels.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities

The weakness with choppy trend continued in the Nifty and still there is no respite for bulls at the lows. The chart pattern of daily and weekly signal a possibility of an upside bounce in the market from the lows of around 15650-15680 levels in the next 1-2 sessions. On the higher side 15900 remains an overhead hurdle for the near term.

S Ranganathan, Head of Research, LKP Securities

Stocks gave up gains today as investors were nervous on the selling across Chinese markets by global funds coupled with the policies of the Chinese authorities and the likely impact on Indian markets despite knowing that it is also a positive for India. While we did see profit booking across banks and the pharma pack on account of negative newsflow on few pharma names, certain pockets across the broader market like textile exporters & coffee stocks posted smart gains on the back of rising coffee futures.

Vinod Nair, Head of Research, Geojit Financial Services

The domestic market skewed in favour of the bears, failing to hold onto its early gains due to weak global cues and selling in pharma stocks. Bleeding pharma companies pulled down the market due to a weak start to sector earnings season. It created panic as the sector is priced with high expectations. Broadly, barring metals and consumer durables, all major sectors traded in negative territory. Following heavy selling in China and weakening Asian peers ahead of the crucial Fed Reserve policy meeting stated this week.

Sumeet Bagadia, Executive Director, Choice Broking

Technically, on the daily chart, the Nifty50 index has formed a long bearish candlestick and closed below the prior two days of lows. However, there is good support at around 15650 levels, which is a 50-days SMA support. Overall, the nifty index is struggling in a range of 15700-15900 and either side breakout will decide the further direction. At present, Nifty is finding resistance around 15900 levels while on the downside; support is intact at 15600 levels.

Gaurav Udani, CEO & Founder, ThincRedBlu Securities

Nifty made a bearish bar today, after making a high of 15881, it made a low of 15701 and closed at 15744. Longs need to be cautioned, any break below 15580 will trigger Nifty to reach 15500 and 15400 levels. Nifty has a strong resistance in 15880-15920 range, any bounce towards it should be used to book profits. Fresh longs to be considered only above 16000 on closing basis.

Abhishek Chinchalkar, CMT Charterholder and Head of Education, FYERS

Currently, Nifty remains in a consolidation mode between 15500-15400 on the downside and 15900-16000 on the upside. Until we get a decisive move out of this band, one should avoid building directional trades in the index and instead prefer a stock-specific long/short approach. Having said that, with the Federal Reserve meeting scheduled tomorrow and the monthly F&O expiry on Thursday, it would be advisable to trade on a lighter note, as we could see a pickup in volatility over the next two sessions.