The markets opened on a weak note and ended with losses, though off the intraday lows. The benchmark indices lost over 2 per cent at close. The traded volumes were lower as compared to the previous session, which is an indicator of short-covering rather than confident buying.
The market breadth was negative as the advance-decline ratio was 1:4. The capitalisation of the breadth was marginally negative as the buying was focused on index heavyweights and retail players sold mid- and small-cap stocks. The banking and mid-cap stocks were the under-performers of the session.
The indices have closed at the upper end of the intraday range as the short-covering bias persisted till the fag end of the session. The oversold markets are likely to see some buying on declines as the intraday low of Monday may act as a short-term support.
The Muhurat session being a token session, no major activity is expected and trades will be on mediocre volumes. The 2,840-2,350 range specified for Monday was violated on the downside and the range for the coming session is likely to be between 2,725 on advances and 2,300 on declines.
The outlook for the markets on the Muhurat session is that of guarded optimism as the bulls are likely to be on the back foot, though laced with hope. Delivery-based, long-term investors may buy high RSC large-cap stocks with a 2-3 years’ view. Wish you a happy Diwali and a happy new year!
Vijay L. Bhambwani
(CEO – BSPLindia.com)
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The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com
Mandatory disclosure: the analyst has no exposure to any scrip recommended above.