Sensex ends 308 pts lower post RBI policy, Nifty near 19,550; Zee zooms 20%

CLOSING BELL ON AUGUST 10, 2023: Private bank and select auto stocks ended with notable losses after the RBI on Thursday asked banks to maintain Incremental Cash Reserve Ratio (ICRR) at 10 per cent.

Stock Market Highlights: The key benchmark indices traded with a negative bias on Thursday after the Reserve Bank of India (RBI) directed banks to maintain incremental cash reserve ratio (ICRR) at 10 per cent, August 12 onwards, in order to reduce liquidity from the system.

Besides, it increased FY24 inflation forecast to 5.4 per cent from 5.1 per cent, discounting near-term risks. Meanwhile, the Monetry Policy Committee kept the policy repo rate unchanged at 6.5 per cent, extending its pause into third straight policy. READ MORE

The S&P BSE Sensex tumbled to a low of 65,509 amid selling pressure in private bank and select auto stocks. The index, however, recouped some losses and ended 308 points lower at 65,688.

The NSE Nifty 50 touched a low of 19,495, and finally settled with a loss of 89 points at 19,543.

Among the Sensex 30 shares, Asian Paints shed 3 per cent. Kotak Bank, ITC, Bharti Airtel, Axis Bank, ICICI Bank and Nestle were the other prominent losers. On the other hand, IndusInd Bank gained 1.5 per cent. JSW Steel, Titan and Bajaj Finance also finished with notable gains.

In the broader market, the BSE MidCap and SmallCap indices finished with modest losses of up to 0.2 per cent. The overall breadth was marginally negative, with over 1,900 shares declining as against 1,686 advancing stocks on the BSE.

Sectorally, the BSE Bankex and FMCG indices slipped nearly a per cent each.

Shares of Zee Entertainment hit the 20 per cent upper circuit at Rs 290.50 on the BSE after the NCLT approved Zee-Sony India merger. Analysts expect the stock to get re-rated. READ MORE

Primary Market Update

The Rs 880 crore TVS Supply Chain Solutions opened for subscription today in the price band of Rs 187 – Rs 197 per share. As of 3:45 PM on Day 1 of the offer period, the issue was subscribed 36 per cent, with retail portion fully subscribed. Here’s what brokerages recommend to do.

4:04 PM

Comment :: 'Limit positions, wait for clear directional cues'

Nifty has been struggling to hold short-term moving average i.e. 20 EMA, mainly due to the underperformance from the banking pack. Besides, it is also facing the hurdle of a declining trendline around 19,650. Amid all, global cues are still neutral and any deterioration on that front may further add to the pressure. We thus recommend limiting positions and waiting for clarity over the next directional move.

Views by: Ajit Mishra, SVP - Technical Research, Religare Broking

4:03 PM

Tech View :: 'Nifty trend remains negative'

Nifty50
On the daily charts, we can observe that the Nifty has faced resistance at the falling trend line, and the 20-day moving average is placed in the zone 19,630 – 19,670. The Nifty was unable to witness follow-through buying and traded with the range 19,645 – 19,467 of the previous trading session. Until the Nifty trades below the zone 19,630 – 19,670, we can expect the pressure to persist. The momentum set up on the daily and hourly time frame charts are providing divergent signals which can lead to a consolidation in the short term. Overall, the trend is still negative, and we expect the nifty to target levels of 19,100 from a short-term perspective.

Bank Nifty

Bank Nifty witnessed selling pressure from the key hourly moving averages placed in the range of 45,000 – 45,100. The daily and hourly momentum indicator has a negative crossover which is a sell signal. The Bank Nifty has decisively closed below the 40-day moving average which is a sign of weakness. Thus both price and momentum indicators is suggesting a further downside over the next few trading sessions. On the downside 44,000 is the short-term target.

Views by: Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas

4:01 PM

Comment :: 'Inflation data in US, India hold importance'

Inflation concerns have resurfaced in the domestic market after the RBI elevated their CPI forecast by 30 basis points to 5.4%, thereby increasing the chances of a protracted rate cut trajectory. Furthermore, the RBI's move to control liquidity through incremental CRR dented the sentiments of the banking sector, although the impact is projected to be limited. Against this backdrop, investors will be closely watching the US inflation print today and the domestic inflation data on Monday.

Views by: Vinod Nair, Head of Research at Geojit Financial Services.

3:59 PM