Indian stock market benchmarks Sensex and Nifty closed lower on Tuesday after some profit-taking in heavyweight stocks like Reliance Industries, Power Grid, State Bank of India, and ICICI Bank amid mixed global cues. The Sensex ended 68 points lower at 66,459 while the Nifty lost 20 points to close at 19,733.
The mid-cap BSE Midcap index underperformed the Sensex, falling 0.23% despite hitting a record intraday high. The small-cap BSE Smallcap index ended 0.50% higher after reaching its all-time peak during the session.
Most sectoral indices ended in the red. The Nifty IT index was a bright spot, gaining 1.20% with all components rising. Nifty Metal, Pharma, and Private Bank indices also inched up marginally. However, Nifty Realty dropped 1.77% and was the top losing sectoral index. Nifty Healthcare, Oil & Gas, and Bank indices also declined.
Overall, the market closed lower as investors booked some profits in leading stocks after recent gains. But broader indices like mid-caps and small-caps hit new highs, displaying resilience.
Regarding Nifty’s outlook today, Siddhartha Khemka of Motilal Oswal notes the index gave up early gains to close flat at 19,734. He says small caps rose 0.7% as metal stocks gained on hopes of China stimulus. Overall he expects consolidation near current levels as earnings season progresses.
Rupak De of LKP Securities adds that positive divergence indicates potential upside reversal ahead. He sees a sideways-to-positive bias above 18,550 and decisively above 19,800 could take the Nifty toward 20,000.
For Bank Nifty, Kunal Shah of LKP Securities says the index faces a tug-of-war between bulls and bears, resulting in consolidation. He sees resistance at 45,800 where a breakout could lead to more upside. Support is at 45,300 and a break below it could give control to bears, leading to a fall toward 45,000-44,700.
In essence, analysts foresee Nifty trading in a range with a positive undertone as earnings unfold. Bank Nifty continues its struggle between bulls and bears around the 45,800 resistance and 45,300 support.
Global factors will steer market direction this week. The Bank of England rate decision and US jobs data will be pivotal.
US manufacturing activity rose in July but lagged forecasts, with ISM PMI at 46.4 versus 46. The final July US S&P Global Manufacturing PMI was 49 compared to 46.3 in June.
Last week, the Fed raised rates by 25bps to 5.25-5.50%, the 11th hike since March 2022. The ECB also lifted rates by 25bps, the 9th straight increase from below zero last year.
John Lynch of Comerica Wealth Management said persistent Fed hikes could pressure US stocks given valuations and policy lag effects. ECB easing may aid European shares despite the Ukraine war.
Oil prices dropped on August 1 as the dollar firmed and profit-taking emerged after the July rally. Brent fell 63 cents to $84.80 per barrel after hitting a three-month peak on Monday.
Essentially, critical central bank decisions, economic indicators, and geopolitics will shape market action after ambiguous signals last week. Oil retreated on profit-booking despite supply constraints.
Stocks like Titan, IndiGo, and Ambuja Cements will remain in focus as they announce Q1 FY2024 results today.
Hero MotoCorp shares will also be watched after heavy selling yesterday due to ED raids on Chairman Pawan Munjal over alleged money laundering.
Other stocks including Metro Brands, Adani Total Gas, PVR INOX, Thyrocare, and MakeMyTrip will stay on the radar after reporting their Q1 numbers on Tuesday.
Essentially, quarterly earnings and company-specific developments will dictate trading interest in selective stocks today. Investors will monitor the financial performance and management outlook in this challenging environment.
Piramal Enterprises, Hindustan Copper, and Indiabulls Housing Finance are under the F&O ban list today as per the stock exchange. They have exceeded 95% of market-wide position limits in the derivative segment. However, trading will be allowed in the cash market for these securities.
For potential intraday trading stocks today, market experts like Ganesh Dongre of Anand Rathi, Anuj Gupta of IIFL Securities, and Sumeet Bagadia of Choice Broking have suggested six buy ideas.
These technical analysts have recommended specific stocks based on chart patterns and indicators signaling upside potential for short-term gains. Their suggestions are aimed at active traders looking to benefit from favorable intraday setups and volatility. The experts analyze daily market action to identify opportunities for quick profits through day trades.
Ganesh Dongre recommends buying HDFC Life at Rs 642 with a stop loss of Rs 630 and a target of Rs 660. He says in the short-term, HDFC Life shows a bullish reversal pattern and sees potential for a bounce up to 660 if it holds the 630 support.
Dongre also suggests buying Reliance Industries at Rs 2,518 with a stop loss of Rs 2,490 and a target of Rs 2,570. He notes the stock has exhibited a bullish reversal setup on the short-term chart. Holding 2,490 support could result in a bounce towards 2,570.
Sumeet Bagadia advises going long on Escorts Kubota at Rs 2,563 with a stop loss of Rs 2,510 and a target of Rs 2,635. He says Escorts has rebounded from the strong support around its 20DMA and broken out above resistance at 2,450 backed by strong volumes. Bagadia sees potential for further upside towards 2,635 based on technical indicators.
For HCL Technologies, Bagadia recommends buying at Rs 1,138.5 with a stop loss of Rs 1,110 and a target of Rs 1,175. He notes HCL Tech shows a consistent uptrend trading above key moving averages, indicating a positive bias. Bagadia sees scope for more upside if it breaks the resistance at 1,155 based on technical factors.
