Market to remain weak below 72,100pts

Mumbai: The domestic stock market experienced a significant rebound after hitting the expected support level of 70,000 points. The metals and technology sectors outperformed other indices, while the FMCG and private bank stocks showed some weakness.

“We believe that this is a strong pullback from the recent sell-off between 72,100 and 70,000, and the market would remain weak with a negative bias until the Sensex crosses 72,100,” says Shrikant Chouhan, head (equity research), Kotak Securities.

If it crosses 71,050 points, then the next levels to watch will be 71,500 and 72,100 points. However, if it falls below 70,600 level, the market may weaken further and go down to 70,000-69,700 or 69,600 levels. Bank Nifty has stopped at expected levels (200-day SMA), but the pull-back is weak, which may keep the index between 45,500 and 44,500 for the next few days.

Prashanth Tapse, senior V-P (research), Mehta Equities, says: “After witnessing heavy profit-booking in recent sessions, investors resorted to short covering ahead of F&O expiry on Thursday, which helped benchmark Sensex close above the crucial 71k mark.”

Helping positive sentiments were improving European stock markets on backdrop of negative US Treasury bond yields which were seen weighing on the US Dollar. Despite the rebound, one may see sharp gyrations in the market in the near to medium-term due to a lot of uncertainty surrounding West Asia conflict, renewed inflation worries and delay in rate cuts from the US Fed.