Dear Trader –
From the Nifty future all-time high level of 21,680 points, the
Nifty future slumped more than 360
points or 1.66% and settled at 21,169. The Sensex plunged by over 1,400 points
from its lifetime high of 71,913 to end at 70,506, a 1.30% cut.
Geopolitical tensions
also played spoilsport as impact on shipping routes in the Red Sea region
dented investor sentiment.Traders were also tracking rising cases of the Covid
sub-variant JN.1 in India. On Wednesday, 614 cases of Covid-19 were reported
across India, the highest since May 21.
Hindustan
Construction, SpiceJet, Man Industries, Dish TV, MTNL, Indiabulls Real Estate,
and Texmaco Infrastructure are among the smallcap stocks that dropped 9-12% on
Wednesday. There was selling across sectors, but power, telecom, metal,
automobiles, capital goods, and real estate bore the brunt of it.
The Nifty Energy index
snapped a five-session gaining streak and ended nearly 3% down. The BSE Power
index, which hit a lifetime high earlier in the day, slumped more than 4%. In
the last month, the index has rallied more than 19%.
The Nifty Metal index
ended in the red for the second straight session. Vedanta, Tata Steel, NMDC,
and SAIL finished over 4-6% down. Meanwhile, information technology stocks were
under selling pressure following weak guidance by Accenture Plc. The Nifty IT
index dropped for the second session.Stocks in the public sector also weren’t
spared, with the Nifty PSE index finishing 4% lower.
The banking pack also
witnessed a bear attack, with public sector banks getting butchered the most.
The Nifty PSU Bank index registered its biggest single-session decline in over
a year.
Global Markets –
European shares gained
on Wednesday on rising bets of interest rate cuts following softer inflation
data from the UK and Germany, while a rise in commodity prices lifted resource
stocks. The pan-European STOXX 600 was up 0.3% by 0818 GMT, with energy and
telecom sectors leading gains.
Data showed German
producer prices fell more than expected in November, while British inflation
dropped way more than expected last month, with the headline rate falling to
its September 2021 lows, strengthening the case for rate cuts. The German DAX
was up 0.2%, while the UK’s FTSE 100 jumped 1.3%.
Nifty futures opened at 21595.10 points against the previous close
of 21527.75 and opened at a low of 21164.15 points. Nifty Future closed with an
average movement of 515.85 points and decline of around 358.25 and 21169.50 points…!!
At the start of intra-day trading December gold opened at Rs.62533
fell from a high of Rs.62610 points to a low of Rs.62311 with a Decline of 41 points,
a trend of around Rs.62435 and December Silver opened at Rs.74951, fell from a
high of Rs.75075 points to a low of Rs.74611 with a rise of 125 points, a trend
of around Rs.74699.
Meanwhile,
The domestic market
saw a sharp and abrupt sell-off in the second half, despite the positive trend
in global peers. This is attributable to profit booking from the recent sharp
rally stretching valuations of mid- and small-cap stocks. The recent uptick in
crude prices prompted investors to book profit.
Domestic equities are
witnessing sell off after a sharp run up of more than 12% in last seven weeks.
We expect market to consolidate in the near term as investor resort to profit
booking and access the potential risk of rising covid cases especially in
Kerala and Karnataka, making them cautious in the market.
Overall, we remain
positive on the market and expect recovery after a pause supported by global
macros along with interest rates peaking out and healthy domestic macros.
Technically,
the important key resistances are placed in October Nifty future are at 21169 levels,
which could offer for the market on the higher side. Sustainability above this
zone would signal opens the door for a directional up
move with immediate resistances seen at 21202 – 21303 levels. Immediate support
is placed at 21008 – 20880 levels.
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