Sensex, Nifty Decline For Third Day On Global Market Trend
Dear Trader…
The 30-share BSE Sensex fell by 542.10 points or 0.82% to settle at 65,240.68. The Nifty Future declined 128.40 points or 0.66% to end at 19468.15. After four months of consecutive rally, Dalal Street bulls took Fitch's move to downgrade US rating as an excuse to book some profits off the table. Sensex has plunged over 1,200 points in 2 days while Nifty Future ended below the 19,400-zone today. In the two-day selloff, investors have become poorer by Rs 4.4 lakh crore as the total market capitalisation of all BSE-listed stocks dropped to Rs 302.36 lakh crore.
While Fitch's statement had nothing new to offer as it is a well-known fact that developed market governments are getting more indebted, the downgrade of US rating to AA+ from AAA is seen as being sentimentally negative for riskier assets. In sync with the risk-off reaction in global and other Asian markets, Sensex ended 542 points weaker on Thursday expiry day with Reliance Industries (RIL), banks and IT stocks leading the downside.
FII and FPIs, on Thursday saw a net sold of Rs. 317.46 crore in the cash segment. A total of Rs. 11,696.76 crore was sold against a total purchase of Rs. 11,379.30 crore. Domestic institutional investors saw a net purchase of Rs. 1729.19 crore in the cash segment. A total of Rs. 7853.11 crore was sold against a total purchase of Rs. 9582.30 crore.
Meanwhile, Global markets are still grappling with the impact of the US rating downgrade, with spiking bond yield and a strengthening dollar index. However, the pharma sector has managed to weather the storm thanks to its strong earnings outcome, while mid and small-cap stocks have outperformed the benchmark index.
The domestic service PMI has surpassed market expectations, reaching a 13-year high due to a rise in new orders, particularly in international sales. As the Indian economy is on a multi-year upcycle, Indian bulls are using the correction as an opportunity to accumulate quality stocks at better price points for handsome gains over the next 2-5 years.
Technically, the important key resistances are placed in July Nifty future are at 19468 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 19505 - 19533 levels. Immediate support is placed at 19404 - 19373 levels.
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