Sensex, Nifty close lower on profit-booking; analysts say more downside likely

Sensex and Nifty saw profit-booking on Tuesday amid high volatility in the domestic market. Sensex fell 693 points to 78,956 and Nifty ended 208 pts lower at 24,139. Market cap of BSE-listed firms stood at Rs 445.30 lakh crore on Tuesday against Rs 449.82 lakh crore in the previous session. 

Analysts are bearish on the prospects of the market in the near term.

Rupak De, Senior Technical Analyst, LKP Securities said, "Bears have returned to the market as the index repeatedly failed to break above the 21 EMA. The near-term trend appears negative. On the upside, 24,250 now serves as a new resistance level, and as long as Nifty remains below 24,250, the strategy should be to sell on rallies. On the downside, initial support is around 24,000; if the index falls below this level, it may decline further towards 23,700."

Prashanth Tapse, Senior VP (Research), Mehta Equities said, “Domestic indices underperformed global equity markets as investors resorted to profit-taking in banking, IT, telecom, metals and oil and gas shares. Despite falling inflation levels, economists were of the view that inflation will rise once again, which could mean that RBI will not be in a hurry to tinker with interest rates in the near term. Also, current market valuations are very high and hence we may witness select profit booking with bouts of intra-day volatility in the near term.”

Shrikant Chouhan, Head Equity Research, Kotak Securities said, “Technically, a reversal formation and bearish candle on daily charts indicating further weakness from the current levels. We are of the view that, the intraday texture of the market is weak but 50 day SMA (Simple Moving Average) or 24,000/78,800 would be the trend decider level for the day traders. Above 24,000/78,800, we could see one pullback rally till 24,250-24,300 / 79,500-79,700. On the flip side, below 24,000/78,800 selling pressure is likely to accelerate. Below the same, the market could slip up to 23850-23775 / 78500-78100.”   

Around two stocks hit their lower circuits and 11 stocks hit their upper circuits on BSE.

Market breadth was negative as out of 4026 stocks traded, 1266 stocks ended in the green on BSE. Around 2,676 stocks closed in the red while 84 stocks remained unchanged.

Stocks such as HDFC Bank, Bajaj Finance, Tata Motors, Tata Steel, SBI and PowerGrid led the losses on Sensex, falling up to 3.46%. Of 30 Sensex stocks, 23 ended in the red.

US markets 

Overnight, US markets ended on a mixed note.

While NASDAQ Composite Index added 37.37 pts to 16,782, S&P 500 index closed 3 points higher at 5347.77. Dow Jones Industrial Average plunged 148 points to 39,346 on Monday.

Asian markets 

Asian markets ended higher today. Japan's Nikkei zoomed 1207 pts to 36,232 but Hang Seng gained 62 pts to 17,174 today. Taiwan Weighted index was up 23 pts to 21,796. Kospi also rose 3.20 pts to 2621.50 on Tuesday. 

European markets 

UK’s FTSE was down 12 pts to 8195 on Tuesday.  France's CAC slipped 17.42 pts to 7,233 and DAX fell 34 points to 17,961.