Further correction likely

Mumbai On the July monthly F&O series expiry day, the benchmark indices ends lower, where the 30-share benchmark index BSE Sensex was down by 440 points. Among sectors, despite weak market conditions Pharma index outperformed rallied over 3 per cent, whereas Auto index trimmed over one percent.

“Technically, on the backdrop of positive global sentiments, our market opened with a gap-up, but after a strong opening throughout the day, it witnessed profit booking at higher levels,” says Shrikant Chouhan of Kotak Securities.

On daily charts the index has formed lower top and bearish candle, which indicating further correction from the current levels. For traders now, 66,700 points would be the key resistance zone. As long as the index is trading below the same, the correction wave is likely to continue below which, the index could slip till 66,100-66,000 levels. On the flip side, above 66,700 points, the market could rally till 66,900-67,000 levels.

Vinod Nair, head (Research), Geojit Financial Services, says: “The FOMC’s decision aligned with market expectations as they implemented a 25 base points hike and expressed a data-centric approach for future rate actions.” Positive global sentiment prevailed due to the reduced prospects of a US recession. Despite this, the domestic market witnessed sharp corrections led by banks and autos, while pharma stocks performed on a positive start to their earnings season.