Nifty sildes below support, may fall further

For the second consecutive session the benchmark indices ended sharply lower with foreign portfolio investors turning net sellers on Tuesday. The BSE Sensex closed at 38,276.63, down by 323.71 points or 0.84 per cent while Nifty-50 closed at 11,497.90, down by 100.35 points or 0.87 per cent.

The broader market performed even worse with the BSE Mid-Cap down 0.98 per cent and Small-Cap down 0.85 per cent.

Among the sectoral indices IT, capital goods and consumer durables finished the day in the green while all other sectoral indices closed in the red. The India VIX, which measures the implied volatility of the Nifty 50 options closed at 26.30 down by 0.47 per cent and its intra-day high at 26.81 was lower than 27.83 touched in previous trading session.

Despite mixed cues from the global markets, domestic market saw last hour sell off.

Among the Sensex stocks only six stock closed with gains and remaining closed in the red, the top losers were Tata Motors (-4.60 per cent), ICICI Bank (-3.77 per cent), Bharti Airtel (-3.10 per cent), Reliance Industries (-2.91 per cent) and Vedanta (-2.07 per cent).

Foreign portfolio investors were net sellers of equities worth Rs 645.08 crore while the domestic institutional investors saved the day by turning net buyers by Rs 818.84 crore, as per provisional data provided by the stock exchanges

Technical View

Nagaraj Shetti, Technical & Derivative Analyst, HDFC Securities said, " The Nifty witnessed a sharp weakness on Tuesday and closed the day lower. The crucial lower support of 11,550 levels, which was holding since last one month was broken on the down side and the Nifty closed below it. Technically this could indicate a down side breakout of the support. Next lower levels to be watched at 11,400 in the short term.

Mustafa Nadeem, CEO, Epic Research said, "It was a sell-off that was followed after 4 days of marginal losses. It was a fifth consecutive day that the Nifty closed in red and Tuesday has been the biggest loss it has posted in 3 months. Secondly, Nifty has closed below 11500 marks which it was sustaining since March last week. This tells a lot about the shift in the undertone of sentiments."

"The heightened volatility as reflected through volatility index India VIX and dent in the global sentiments are further aiding this bearishness. Nifty has its support now placed at 11,400, more precisely placed at 11,389," Nadeem said.

Market View

Jagannadham Thunuguntla, Senior Vice President and Head of Research (Wealth), Centrum Broking said, "Indian markets have been on a shaky ground for the past couple of days driven by ambiguity associated with the US-China trade negotiations and less-than-inspiring ongoing corporate earnings season. Further, the ongoing election season is another major variable that markets are watching closely."