Nifty, Sensex end in red for 3rd straight day; volatility to persist amid inflation, rate hike fears

Indian fairness markets ended decrease on Tuesday amid weak international cues. After fluctuating between good points and losses for majority of the day in a extremely risky session, the important thing benchmark indices ultimately ended close to intraday lows. BSE Sensex closed 105.82 factors or 0.19% decrease at 54,364.85, whereas the NSE Nifty 50 ended 61.90 factors or 0.38% decrease at 16,240. Sectorally, metallic, energy, oil & gasoline, healthcare, IT and realty indices down 1-5%. On the opposite hand, financial institution index added 0.5%. In broader markets, BSE midcap and smallcap indices fell 2% every. Investors dumped metallic, energy and oil & gasoline shares amid issues of a fragile international financial development prospects. Markets are seemingly to stay risky in coming periods as merchants are involved that central banks of key developed economies might resort to extra rate hikes going forward

Mohit Nigam, Head – PMS, Hem Securities

“In late afternoon trade on Tuesday, Indian equity benchmarks were trading lower amid choppy trade, though selling pressure in Metal, Utilities, Power, and Realty stocks kept the upside in check. Bank, and FMCG stocks drove the headline indices higher, even as investors around the world remained wary of aggressive hikes in COVID-era interest rates. Sentiment has risen as the commerce and industry ministers of India and Oman meet on Wednesday to discuss ways to strengthen economic ties between the two countries. On the global front, Asian markets were mainly weaker on concerns that more interest rate hikes in the United States might halt global growth. European stocks were trading higher as global markets attempted to recover from a recent sell-off sparked mostly by concerns about inflation and rising interest rates – and the possibility of a worldwide recession. Immediate support and resistance for Nifty are 16,000 and 16,500 respectively. Immediate support and resistance for Bank Nifty are 33500 and 35,000 respectively.”

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

“Traders are concerned that central banks of key developed economies could resort to more rate hikes going ahead to temper rising inflation, which could hurt growth and trigger more foreign fund outflows from emerging markets, including India. Technically, after a muted opening market the Nifty witnessed intraday recovery but one more time it found resistance near 16400 and corrected sharply thereafter. On intraday charts, the index is still holding a lower top formation which is broadly negative for the market. For the traders, 16200 would be the key level to watch out and below the same there is a strong possibility of a quick intraday correction up to 16100-16050 levels. Above 16300 level, a fresh pullback rally is not ruled out and above the same, the index would retest the level of 16400-16450.”

Sumeet Bagadia, Executive Director, Choice Broking

“After a positive opening benchmark indices traded in a narrow range with slight positive bias for the whole day but during closing session sharp selloff eroded day’s gain and index ended at red. The volatility in crude prices, inflation concerns, earnings and growth fears continue to be the key variables impacting the market. INDIA VIX has settled at 22.30 with a rise of 1.23 percent in a day. Technically, the index has also formed a bearish candlestick pattern on the daily chart, which is a bearish indication for the near term. Fibonacci retrenchment has support at 16140, and would be acting as an important barometer for next trading day. The Nifty has slipped from the middle Bollinger band to lower Bollinger band in daily charts. Indicator Stochastic is hovering near the oversold zone. Traders may expect range bound movement until 17100 and 17450 are protected. At present, the index is having support at 16100 followed by 16000 levels while resistance is placed at 17600. On the other hand, Bank nifty has support at 33900 while resistance at 35000 levels.”

Deepak Jasani, Head of Retail Research, HDFC Securities

“Nifty could not hold on to the intraday bounce after a weak opening on May 10 and closed in the negative for the third consecutive session. Equity mutual funds see net inflow of Rs 15,890.3 crore in April compared with inflow of Rs 28,463.4 crore in March. Monthly contributions into systematic investment plans fell to Rs 11,863.1 crore after hitting an all-time high of Rs 12,327.9 crore in March. European stocks rose as dip buyers emerged from the ruins of Monday’s rout, even though sentiment remained fragile over concerns about inflation and economic growth. Asian equities slipped to their lowest in nearly two years overnight, before trimming losses. The fact that the Nifty closed almost at the intraday low after making an attempt to recover does not portend well. 16341-16013 could be the band for the Nifty for the near term.”

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