Markets continue to trade in the red after opening lower due to weakness in banking and PSU shares. The Nifty declined 27 points, at 5,722 and the Sensex was down 74 points, at 19,065.
Selling pressure was witnessed in Bank Nifty; the index was down 1.8%, at 11,276 due to short build up of positions ahead of the monetary policy tomorrow. Economists expect 25-50 bps rate hike as food prices continue to remain at elevated levels.
Markets may decline further due to selling pressure in State Bank of India (down 3%), ICICI Bank (down 0.8%) and HDFC Bank (down 1.2%) which is dragging the Nifty down.
Navneet Daga, Derivative Analyst, KR Choksey Securities said, "options data is indicating a further decline on the index to sub 5629 levels and 5600 may act as support because it has maximum open interest build up." Daga added, "If Nifty fails to hold above 5750 on closing basis for next two to three sessions, we may see selling pressure getting intense in the market towards 5620 levels and a close below 5750 would lead to further long liquidation of positions."
Selling pressure was also witnessed in BSE PSU index as well, it was down 1.8%. Top losers were mainly PSU Banks-UCO Bank, down 6.7%, Bank of India declined 5.6% and United Bank dipped 4.6%.
BSE Consumer Durables shares continued to the lead the gains; the index was up 1.2%. Videocon Industries zoomed 2.2%, Titan Industries added 1.8% and Gitanjali Gems gained 1.8%. Investors are betting on the consumer driven sectors for the next led of rally. TS Harihar, Co-Head-Institutional Derivatives, ICICI Securities, “the next 10 years belong to consumer driven industries that will benefit from the spending power. Long-only fund managers are betting on consumer driven companies which will experience a multiplier effect on their bottom-line because of increasing demand and shifts in demand patterns."
From the broader markets, midcap and smallcap indices were down 0.5% each. Market breadth was negative, 1442 stocks declined for 982 stocks which advanced.
