Sensex Snaps 11-Day Winning Streak Amid Global Economic Worries

Sensex Snaps 11-Day Winning Streak Amid Global Economic Worries
Sensex Snaps 11-Day Winning Streak Amid Global Economic Worries
Sensex Snaps 11-Day Winning Streak Amid Global Economic Worries
Sensex Snaps 11-Day Winning Streak Amid Global Economic Worries

Sensex Snaps 11-Day Winning Streak Amid Global Economic Worries

Sensex Snaps 11-Day Winning Streak Amid Global Economic Worries. Image/HT__Print

The Sensex, India’s equity barometer, saw its impressive 11-day winning streak come to an end on Monday, closing in negative territory. This downturn was primarily driven by losses in select heavyweight stocks, including HDFC Bank, Reliance Industries, and Infosys.

Global Economic Concerns Weigh on Domestic Market

The domestic market followed the global sentiment trend, which was characterized by weakness. This was especially prominent ahead of critical central bank meetings across various countries, including Norway, Sweden, Switzerland, Britain, the United States, and Japan. Investors grappled with growing concerns about global economic growth.

Upcoming Central Bank Meetings

As reported by Reuters, world shares declined, and the dollar strengthened, reflecting the apprehension surrounding global growth prospects. Key central bank meetings were scheduled throughout the week, with the US Federal Reserve’s outcome due on Wednesday, the Bank of England’s outlook on Thursday, and the Bank of Japan’s outcome awaited on Friday. In the midst of this, trading on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) will remain closed on Tuesday due to Ganesh Chaturthi 2023.

Sensex and Nifty Performance

The Sensex began the day 173 points lower at 67,665.58 compared to the previous close of 67,838.63. Unfortunately, it continued its downward trajectory throughout the session, closing 241.79 points, or 0.36 percent, lower at 67,596.84. The Nifty50 index had a similar story, opening at 20,155.95 (versus the previous close of 20,192.35) and eventually closing 59 points, or 0.29 percent, lower at 20,133.30. The mid and small-cap segments also followed this negative trend, with the BSE Midcap index falling by 0.27 percent and the Smallcap index dropping by 0.60 percent.

Crude Oil Prices and Market Sentiment

Crude oil prices continued their upward climb, supported by tight supply conditions. Additionally, optimism prevailed as expectations mounted that the US Federal Reserve would maintain its current interest rates. Brent Crude surpassed the $94 per barrel mark, rising approximately half a percent.

Top Nifty Gainers and Losers

Within the Nifty index, 26 stocks ended in the red while 24 posted gains. Notable losers included Hindalco (down 2.19 percent), HDFC Bank (down 1.93 percent), and Adani Ports (down 1.80 percent). On the flip side, top gainers included Power Grid (up 3.12 percent), Titan (up 2.66 percent), and HDFC Life Insurance Company (up 2.43 percent).

Sectoral Performance

Most sectoral indices closed lower on Monday, with exceptions like the Nifty PSU Bank index, which surged by 3.39 percent. All 12 components of the index ended in positive territory, with Indian Overseas Bank, UCO Bank, and Punjab & Sind Bank leading the way with gains of over 10 percent each. Meanwhile, Nifty Auto, Consumer Durables, FMCG, and Oil & Gas sectors recorded gains. Conversely, Nifty Realty, Media, and Metal indices ended with notable losses. The Nifty Bank index closed down by 0.54 percent, while the Private Bank index declined by 0.83 percent.

Market Experts’ Insights

Vinod Nair, Head of Research at Geojit Financial Services, noted that the domestic markets faced headwinds as they awaited numerous policy rate decisions scheduled for the week. He pointed out that concerns about demand in China, coupled with crude supply cuts, weighed on investor confidence. Additionally, fears of a Fed rate hike, reflected in elevated US bond yields, had investors awaiting clarifications from major central banks.

Shrikant Chouhan, Head of Research (Retail) at Kotak Securities, highlighted the end of the 11-session winning streak, attributing it to profit-taking in banking, realty, IT, and telecom stocks. He also noted global headwinds, including rising crude oil prices, a strengthening dollar index, and increasing US treasury yields, which led to cautious investor sentiment.

Technical Analysis of Nifty

Kunal Shah, a senior technical and derivative analyst at LKP Securities, described the Nifty index’s consolidation within a broad range. He noted significant call writing at higher levels, indicating that market participants were hedging against potential downward movements. Shah suggested that the index would likely continue its sideways trend in the upcoming trading sessions, with support at 20,100 and resistance at 20,200.

Deven Mehata, an equity research analyst at Choice Broking, identified support for the Nifty around the 20,060-19,950 zone. He mentioned that the highest open interest (OI) on the Call side was observed at 20,200 and 20,300 strike prices, while the highest OI on the Put side was at the 20,000 strike price. For the Bank Nifty, support levels were at 45,600-45,800, with resistance at 46,300-46,500 levels.

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