The Indian equity benchmarks ended lower for the second consecutive day on October 10 on weak global cues and selling across sectors barring the information technology space.
The market opened a percent down and traded in the negative territory for the most part of the day but buying in financials and IT stocks ahead of TCS Q2 numbers helped the indices cut intraday losses.
The 30-pack Sensex and the broader Nifty sank to an intraday low of 57,365.68 and 17,064.70, respectively. At close, the Sensex was down 200.18 points or 0.34 percent at 57,991.11, and the Nifty was down 73.70 points or 0.43 percent at 17,241.
"Fear of an aggressive rate hike by the Fed on the back of strong employment data in the US disrupted the global equity trend. Inflation in the US is forecasted to stay high, given low supply and high-demand scenarios," said Vinod Nair, Head of Research at Geojit Financial Services.
"...rising crude prices and depreciating rupee is increasing the risk of imported inflation in India, affecting the domestic market."
Stocks and sectors
Tata Motors, Tata Consumer Products, Hero MotoCorp, Asian Paints and ITC were among the top Nifty losers. Axis Bank, TCS, HDFC Life, Eicher Motors and Maruti Suzuki were the top gainers.
Except information technology, all sectoral indices ended lower with PSU bank, FMCG, and Energy indices down 1 percent each.
On the BSE, realty, FMCG, capital goods and power indices were down a percent each. Auto, healthcare and oil & gas were down 0.5 percent each. The information technology index, however, added nearly a percent.
Broader indices underperformed the benchmarks, with the BSE midcap index sliding 0.87 percent and smallcap index 0.58 percent.
A short build-up was seen in Indiabulls Housing Finance, Tata Motors and Dr Lal PathLabs and a long build-up was seen in the Axis Bank, IDFC and Persistent Systems.
RITES, Shree Renuka Sugars, Jyothy Labs, JB Chemicals, HBL Power Systems and EID Parry were among the stocks to touch their 52-week high on the BSE.
Among individual stocks, a volume spike of more than 100 percent was seen in Birlasoft, Tata Motors and Rain Industries.
Outlook for October 11
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:
Due to a lack of positive strength in global markets and persisting worries about more rate hikes by the key central banks, investors are not taking any chances and steadily trimming their holdings.
Caution along with weak market sentiment will prevail as all eyes will be on the US Federal Open Market Committee meeting minutes to be released on October 12, which will give some hints about the future rate-setting decision by the Fed Reserve.
Technically, the Nifty found support near 17,050 and bounced back sharply. On daily charts, the index formed a bullish candle and a reversal formation, which is broadly positive.
For traders, the support has shifted to 17,150 from 17,050. Above 17,150, the index can retest 17,400-17,450. On the flip side, a fresh round of selling is possible if the index breaches 17,150, below which, the index can slip to 17,050-17,000.
Ajit Mishra, VP-Research, Religare Broking
The Indian market is showing tremendous resilience amid a weak global environment, however, traders are facing tough times due to intermediate volatility. With the beginning of the earnings season, we expect the choppiness to remain high.
On the index front, the Nifty can extend the rebound if it manages to reclaim 17,400 else consolidation will continue. Participants should focus more on risk management and limit leveraged positions.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The Nifty, in the week gone by, faced resistance near the key daily moving averages as well as near the 50 percent retracement of the entire September decline. Thereon, the index nosedived on October 10 and attempted to extend below the hourly lower Bollinger Band.
On the downside, however, the index attracted buying support as it inched towards 17,000. From there, it witnessed a sharp recovery and bounced towards the 20-hour moving average.
On the higher side, the short-term upside is capped near 17,400-17,500. The overall structure shows that the Nifty can consolidate near 17,000-17,500 in the short term.
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