Sensex falls today but ends off lows. Gains may be capped in near term, say analysts


Indian markets fell today but ended off lows, as a jump in coronavirus cases at home and around the world stoked fears of renewed restrictions. The Sensex fell over 200 points to settle at 34,961.52, after sliding as much as 1.5% earlier in the session. The NSE Nifty 50 index closed 0.68% lower at 10,312, weighed down by energy and financial stocks.

Coronavirus cases in India jumped to 548,318 while across the globe cases crossed 10 million. Maharashtra, home to India’s financial capital Mumbai and the worst hit state by the outbreak so far, extended its lockdown to July 31.

The Nifty 50 has recovered around 40% from a four-year low hit in mid-March, as foreign inflows returned to the market. Bajaj Finance Ltd and private-sector lender Axis Bank Ltd tumbled 1.6% and 4.7%, respectively, after S&P Global Ratings cut their ratings to junk, while Coal India slid 5.1% as quarterly profit slumped. HDFC Bank Ltd closed 1.9% higher, helping check broader losses.

Here is what market analysts said on today’a Dalal Street action:

Deepak Jasani, Head Retail Research, HDFC Securities

“Indian benchmark indices ended the session with losses but off the day’s low. The NSE Nifty 50 index ended 0.68% lower at 10,312. Volumes on the NSE were below recent average. Telecom & FMCG stocks did well, while Financials, Materials, IT and Power stocks underperformed.

Global stocks were quiet Monday with Asian markets in the red and Europe flat as the number of coronavirus cases around the globe exceeded 10 million and the epidemic fast-tracked in the United States.

Technically, the Nifty formed a lower top, lower bottom formation compared to the previous day, but did not close at the day’s low. The range for the Nifty in the near term is 10195-10410.”

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities

“On Monday, the market remained well above the 10200 levels. The Nifty managed to close at the highest level of the day. Nifty opened lower on the back of weakness in global markets, however, limited sell off in large-cap stocks helped the index recover back in the second half of the trading session. Technically, the market may consolidate between the levels of 10250 and 10450 before seeing any meaningful movements. Avoid buying at the highest point of the range.”

Vishal Wagh, Research Head, Bonanza Portfolio

“Going forward, major support will be seen around 10195 and Resistance will be 10410.”

Vinod Nair, Head of Research at Geojit Financial Services

“Benchmark indices ended on a negative note, on the back of mixed global cues as surging virus cases around the world and especially in the US, threatened to derail the economic recovery hopes. With states in India set to extend lockdown or reconsidering bringing back lockdown measures, markets seem to be weighing the bad news. As before, uptrend remains intact but the upside may be capped.”

Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments

“The markets were choppy and failed to move in either direction. We will not be able to see a decisive move if we are unable to cross 10450 or break 10200. It is just the beginning of the July series so traders need to maintain patience and wait for the right opportunity to take a one-sided directional trade.”

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