In a day of two stellar listings, benchmark indices recorded their biggest percentage in over two months, falling over one percent each on July 19.
At close, the S&P BSE Sensex fell 1.1 percent to 52,553 while the Nifty50 was down 171 points to close at 15,752.
Meanwhile, bulls turned their focus on the primary market as stocks of GR Infraprojects and Clean Science & Technology doubled investor wealth on their listing day. At close, GR Infraprojects was up over 108 percent, while Clean Science & Technology Ltd was 76 percent higher.
“The day clearly belonged to the primary market with the twin listings of Clean Science & GR Infra making IPO investors happy with stellar listing gains,” S Ranganathan, Head of Research at LKP Securities, said.
“Despite indices losing a percentage, the broader markets were seen buzzing around across select pockets like Exchanges & Depository names even as HDFC group companies witnessed profit-taking today,” he added.
On the broader markets front – the S&P BSE Midcap index fell 0.58 percent, and the S&P BSE Small-cap index was down 0.3 percent – outperforming the benchmark indices.
What led to the fall?
Equity markets across Asia were trading lower over concerns of rising inflation, and an increase in COVID cases. Back home, muted results from HDFC Bank weighed on banking stocks.
“Shadowing global sell-off, Indian indices slipped succumbing to world inflation woes, FOMC meeting next week and rising covid cases,” Vinod Nair, Head of Research at Geojit Financial Services, said.
“Banks led the domestic downtrend as initial quarterly results pointed to cautious asset quality due to the impact of the second wave. Slackening economic growth in the US lead to reports of likely downgrade in growth forecast in current year triggering global sell-off,” he added.
Here’s what experts suggest investors should do on July 20:
Expert: Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services
Nifty50 closed near its opening levels with losses of 170 points and wiped away all its previous week’s gains. It formed a Doji sort of candle on the daily scale with long shadows on either side and negated its higher highs – higher lows formation of the last five sessions.
Now, the index has to cross and hold above 15750 zones to witness an up move towards 15900 and 16000 levels, while on the downside support exists at 15700 and 15600 levels.
Expert: Rohit Singre, Senior Technical Analyst at LKP Securities.
Nifty index is again back in its consolidation area of 15600-16000 zone which suggests that we may see some more sideways moments going forwards.
The index reached its demand zone of 15700-15600 zone, and if it managed to hold above the said levels, we may see some swift pullback towards the 15800-15900 zone which are an immediate hurdle on the higher side.
Expert: Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
The level of 15600 on the Nifty is a crucial level of support. If that holds on a closing basis, the market trend remains bullish.
On the upside, a target of 16100 continues to remain open. Hence, dips and intraday corrections should be used to initiate long positions with a stop loss below the level of 15600.
Expert: Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
Nifty had a significant gap down opening on July 19, which was followed by a minor bounce; and then the next round of selling pushed the index further down.
Nevertheless, the index found support near 78.6% retracement of the recent rise, which was near 15700. Also, the daily chart shows that the selling was absorbed near a rising trendline drawn from the previous crucial swing lows.
The index is trading near the support zone of 15700-15600. The index is expected to recover as long as it stays above 15600 on a closing basis.
On the higher side, the index can head back towards the hurdle zone of 15960-16000, which holds the key for a larger upside.
Expert: Sumeet Bagadia, Executive Director at Choice Broking
On the technical front, Nifty has formed the Doji candlestick pattern as well as confirmed the Hanging Man Candlestick pattern which suggests negative movement for tomorrow. Moreover, the Index has given closing below 21DMA, which further adds weakness in the counter.
Hourly Momentum Indicator MACD is also showing negative crossover which suggests weakness for the next day. At present, the nifty is having support at the 15600 levels while resistance comes at 15900 levels.
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