Stock-Specific Trading Likely Amid Expensive Valuations

Mumbai: In the last session of the week, the benchmark indices witnessed a profit booking at higher levels. BSE Sensex was down by 1,848 points. Among sectors, the IT index outperformed, gaining over 1.9 per cent, whereas the PSU Banks and Realty indices lost the most, shedding over six per cent. During this week, the market breached the 200-day SMA (Simple Moving Average) support zone, and post-breakdown, selling pressure intensified.

Amol Athawale of Kotak Securities, said: “Technically, it has formed a long bearish candle on the weekly charts and is holding a lower top formation on the intraday charts, which is largely negative. We are of the view that the current market texture is weak, but oversold. Hence, a strong possibility of a pullback rally from the current levels is not ruled out.” For short-term traders, the 77,800 would be the key level to watch. Above this level, the pullback move could continue 78,500. Further upside may also persist, potentially pushing the market up to the 200-day SMA or 78,800. On the flip side, if the market falls below 77,100 level, selling pressure is likely to accelerate. Below which, the market could slip to the 76,800-76,500 range.

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “Markets continued its downward trajectory as rupee scaling new lows due to strengthening dollar has further dampened investors’ sentiment.”

Vaibhav Vidwani, research analyst, Bonanza, said: “Amid concerns of subdued economic growth and expectations of a slowdown in the quarterly earnings, investors cut their bet on banking and mid & small cap stocks. With expensive valuations of Indian markets at large still a concern, investors would mostly resort to stock-specific activities.”

The Indian stock market closed lower on lower note with the BSE Sensex down by 241 points, settling at 77,378, while the Nifty fell by 95 points to close at 23,431. The decline was broad-based, with all sectoral indices in red except IT stocks, which continued to rise following top IT firm TCS meeting its quarterly profit estimates. Midcap and smallcap indices were also stressed.”

Investor sentiment was impacted by global cues, including concerns over U.S. economic data and continued selling by foreign institutional investors . Despite a brief recovery during the day, the overall market breadth remained weak, with significantly more stocks declining than advancing.