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Taking Stock: Market snaps longest winning streak since April; Nifty below 11,100

July 31
18:06 2020

Profit-booking hit D-Street on the last trading day of July to push the benchmark indices below crucial support levels as the market also snapped its longest winning streak since April 2019.

The bears weighed on markets for the third consecutive day as the S&P BSE Sensex was ended 129 points down at 37,606, while the Nifty50 closed 28 points lower at 11,073.

“Uncertainty was visible as profit-booking and post-earnings performance of index heavyweights impacted the benchmark indices,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

On a weekly basis, the indices closed with some losses following a results-heavy week and stock-specific action in the benchmark indices, he said.

“Markets seem to be in a consolidation mode with momentum slowing down in the last couple of sessions. This trend is expected to stay since uncertainties continue and volatility remains high. Investors are advised to remain cautious and accumulate quality stocks in this uncertain environment,” he said.

For the week, the S&P BSE Sensex, and Nifty50 fell by about 1 percent each. The Nifty saw the biggest fall, down by about 4 percent.

Sectorally, action was seen in healthcare, realty, metals, and IT indices, while profit-taking was visible in energy, oil & gas and finance stocks.

The broader markets outperformed the benchmarks. The S&P BSE Midcap index rose 0.3 percent while the S&P BSE Smallcap index gained 0.8 percent.

Top Nifty gainers included UPL, Sun Pharma, Cipla and Grasim Industries.

Top Nifty losers included Bajaj Auto, HDFC Bank, RIL and Eicher Motors.

Stocks & Sectors

Sectorally, the S&P BSE Healthcare index rose 3.4 percent, the S&P BSE Realty index 1.2 percent and the S&P BSE Metal index ended 0.7 percent higher.

Profit-booking was seen in the S&P BSE Energy index that fell 1.6 percent, S&P BSE Oil & Gas index that was down 0.7 percent and S&P BSE Finance index was down 0.6 percent.

Volume spike of more than 100 percent was seen in stocks like Bandhan Bank, Idea, Cipla, SBI, and Torrent Pharma.

Long buildup was seen in stocks like Idea, Torrent Pharma, and Cadila Healthcare.

Short buildup was seen in stocks like Chola Finance, Indiabulls Housing Finance and SAIL.

More than 100 stocks on the BSE hit fresh 52-week high. These included Laurus Labs, Torrent Pharma, Divi’s Laboratories, Ipca Lab and Ajanta Pharma.

Tata Communications, Best Agrolife and Majesco were among the 300 stocks that hit the upper circuit.

Nearly 400 stocks on the BSE hit lower circuit that including Soya, Prabhat Technologies and 5Paisa Capital.

Stocks in news

State Bank of India stock was up over 2 percent after it reported an 81% increase in Q1 net profit at Rs 4,189.3 crore.

Sun Pharma stock jumped over 5 percent, hitting a 52-week high after the company posted a net loss at Rs 1,655.6 crore in the quarter ended June 2020 and revenue stood at Rs 7,585.3 crore.

Jet Airways shares jumped 5 percent after the troubled domestic carrier acquired six Boeing aircraft.

Dabur India stock was up over 4 percent after the FMCG company reported a net profit of Rs 341.8 crore for the quarter ended June 2020, registering a 5.9 percent YoY decline as lockdown dented business.

Torrent Pharmaceuticals share price jumped almost 10 percent after the company reported a 48.61 percent rise in its consolidated net profit to Rs 321 crore for the quarter ended June 30, 2020, mainly on account of robust sales in the Indian market.

Technical View

The Nifty formed a small-bodied bearish candle on the daily and weekly scale, indicating some selling pressure at higher levels.

The Nifty closed the week on a negative note as it corrected from its weekly high of 11,341 to 11,026 and paused its winning streak of the last six weeks.

The failed breakout above 11,300 and sustained selling pressure at bounce back move indicates that short-term profit booking cannot be ruled out, says Chandan Taparia of Motilal Oswal Securities.

“However, Index has multiple support at 11,050 zones and a hold below 11,050 could confirm more decline towards 10,900 and 10,800-10,750 zones while on the upside resistance exists at 11150 then 11250 levels,” he said.

Disclaimer: Reliance Industries is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments which publishes Moneycontrol.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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