Investors book profit ahead of US Fed meet outcome; Sensex drops 271 pts

Stock market updates: Equity markets consolidated near record high levels on Wednesday as investors awaited the outcome of the US Federal Reserve's monetary policy meeting, due later in the day. Moreover, a rally in crude oil price, which is hovering above $74 per barrel, also had a bearing on the sentiment.

The benchmark S&P BSE Sensex traded within a band of 391 points before settling the day at 52,502 levels, down 271 points or 0.5 per cent. On the NSE, the Nifty50 index erased 102 points, or 0.64 per cent, to close at 15,767 levels.

In the broader markets, the BSE MidCap index slipped 0.95 per cent while the BSE SmallCap index dipped 0.68 per cent.

Market breadth was skewed towards bears as approximately 1,800 scrips declined on the BSE compared with 1,400 scrips that advanced. In the large-cap universe, Adani Ports, Hindalco, JSW Steel, Tata Steel, IndusInd Bank, Power Grid and Reliance Industries were the top laggards while Adani Enterprises, LIC Housing Finance, Adani Transmission, Future Retail, Future Consumer, and Suprajit Engineering were the worst performing stocks in the mid- and small-cap segment.

Sectorally, the Nifty Metal index skidded 3 per cent on the NSE on report that China has ordered state firms to curb overseas commodity exposure. A Reuters report also said China may release State reserves for Copper, Aluminum, and Zinc.

That apart, the Nifty PSU Bank and Realty indices dropped over 1 per cent each. On the contrary, the Nifty FMCG and IT indices gained 0.5 per cent and 0.25 per cent, respectively.

Global cues

Asian shares were subdued on Wednesday with investors wary of any hint of hawkishness from the US Federal Reserve given lofty asset valuations rely so heavily on an endless supply of super-cheap money.

Japan's Nikkei ended 0.5 per cent lower and China's Shanghai Index dipped 1 per cent. South Korea's Kospi and Australia's ASX200, on the other hand, gained 0.6 per cent and 0.01 per cent, respectively. 

In Europe, gains in financial and industrial stocks lifted indices, with the pan-European STOXX 600 up 0.2 per cent.

(With inputs from Reuters)

5:40 PM

MARKET OUTLOOK :: Broader indices may see further profit-booking

Since last couple of days, we have been advising on booking profits and staying light in the market. The way market is behaving around 15,800 – 15,900, the strength is clearly missing. Also if we take a glance at the NIFTY MIDCAP 50 index, it is struggling around the crucial juncture (as it’s placed around the key Fibonacci ratios). In fact, today’s weakness in the broader market is clearly hinting towards some sort of profit booking in the near term. Hence we continue to remain cautious and advise traders to stay light on positions.

 

As far as Nifty is concerned, 15820 – 15900 to be seen as strong resistances; whereas on the lower side, 15700 is to be considered a crucial support. For the weekly expiry session, we would advise traders existing longs and aggressive traders can opt to short as well if we see Nifty around 15820. If the selling happens as per our expectation, the possibility of breaking 15700 increases, which could then lead to some extended correction in the following sessions

Views by: Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel Broking

5:30 PM

TECH VIEW :: Rohit Singre, Senior Technical Analyst at LKP Securities

After forming a Doji candle pattern in Tuesday’s session, Nifty formed a bearish candle on daily chart & has given a close at 15,767 with loss of  0.6 per cent. Nifty has reached to its good support zone of 15,750 and if it breaks below this, then some more slide towards the next support zone of 15,650 is likely. However, if the fall is contained, then some decent pullback can be witnessed towards 15,850-15,900 zone

5:20 PM

MARKET CLOSING COMMENT :: Deepak Jasani, Head of Retail Research at HDFC Securities

Indian Benchmark equity indices broke a four day winning streak and retreated from record highs following weak Asian cues and ahead of the US Fed meet outcome. The Nifty opened marginally in the negative, rose to go into the green in the first 20 minutes of trade but resumed its downtrend later. It closed almost at its intra day low. At close, the Nifty ended 101.7 points, or 0.64 percent, lower at 15,767.55.

 

Nifty fell ahead of the US Fed meeting as traders brought down their positions ahead of the event. This is also reflected in low volumes and sharply negative advance decline ratio. The market might be reluctant to push higher ahead of the Fed meeting beyond a point. While economists don't expect US Fed to alter rates or cut bond buying immediately, any indication of an earlier than expected roll back of stimulus may dampen sentiments. 15648-15835 is the band for the near term for the Nifty. 

5:10 PM

MARKET OUTLOOK :: Technical patterns suggests more correction in the offing

Technically, the index has confirmed a shooting star candlestick pattern on the top which suggests correction in the counter. Furthermore, the index has given closing below 21&50 HMA, which further adds bearishness to the counter. Moreover, Hourly Momentum Indicator MACD is also showing negative crossover, which indicates weakness for the near term. At present, the nifty seems to have resistance at around 16000 levels while immediate support shifted up to 15650 levels.

Views by: Sumeet Bagadia, Executive Director at Choice Broking.

 

5:00 PM

TECH VIEW :: Nagaraj Shetti, Technical Research Analyst at HDFC Securities

The short term trend of Nifty seems to have shattered by Wednesday's decline. The immediate support of 15715-15700 is going to be crucial for a sustainability of uptrend. A decisive move below this support could confirm trend reversal and also a crucial top formation at 15901 levels. Any pullback rallies could find resistance at 15825-15850 levels.

4:51 PM

MARKET STRATEGY :: Traders should limit naked leveraged positions

Markets lost over half a percent in a volatile trading session as participants were in the profit taking mood from the beginning. After the flat start, the benchmark gradually inched lower as the day progressed. Though it tried to recoup some of the intraday losses in the middle however selling pressure in the final hour dragged the Nifty again to day’s low around 15,767 levels. The broader indices too followed suit as both midcap and small cap ended lower by 1.1% and 0.6% respectively. Amongst the sectors, except the defensives like IT and FMCG, all the other indices ended with losses wherein metal, capital goods and banking were the top losers.

 

All eyes are on the US Fed rate decision which is scheduled tonight. We expect the Fed to maintain the status quo on rates however commentary on economy and inflation would be actively tracked by investors. We expect volatility to remain high in the indices due to scheduled weekly expiry. In case of a further slide, Nifty would find support around 15,600-15,650 zone on Thursday. On the higher side, the 15,800-15,850 zone would act as a hurdle. Traders should limit naked leveraged positions and wait for further clarity.

Views by: Ajit Mishra, VP - Research, Religare Broking

 

4:41 PM

MARKET CLOSING COMMENT :: Vinod Nair, Head of Research at Geojit Financial Services

Indian indices slipped ahead of the Fed policy announcement as global markets turned cautious. Weakening MoM sales data and rising prices in the US are adding concerns to ongoing inflationary trend. But Fed maintaining an accommodative policy and a calm comment on short-term inflationary pressure can drive the markets ahead

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4:01 PM

BSE Snapshot

3:58 PM

Volatility Alert

India VIX gains around 2% to end at 14.87 levels

3:55 PM

Sector Watch :: FMCG index ends higher for second day; Tata Consumer hits record peak

3:52 PM

Sector Watch :: All metal index constituents end in the red; Adani Ent SAIL top drags