MUMBAI: Benchmark equity indices snapped a four-day winning run to close lower on Wednesday. Investors were unwilling to take long bets on Dalal Street ahead of the much anticipated outcome of the US Federal Reserve’s monetary policy meeting due later in the day.
Profit-booking was the prevalent theme and defensive sectors in the market found themselves in favour with investors. The Nifty FMCG and Nifty IT indices were the only two sectoral gainers on NSE.
The Nifty50 index ended 0.6 per cent or 101.7 points lower at 15,767.55 and the BSE Sensex gauge closed at 52,501.98, down 271.1 points or 0.5 per cent.
The US central bank is expected to stand pat on interest rates but there is some nervousness among investors on what it will say on interest rate hikes and the timing of tapering its record bond buying program.
Most economists are betting that the central bank will not talk about bringing forward its timeline for rate hikes or for tapering. According to several surveys, most global investors are counting on the Fed to taper bond buying from December this year and raise interest rates by the end of 2023.
Globally, too, the markets were muted with equities in other Asian regions ending lower and those in Europe seeing a tepid start to the day.
In the broader market, profit booking was heavier as the Nifty Midcap 100 and Nifty Smallcap 100 index ended 0.9 per cent and 0.5 per cent lower, respectively.
Given the fact that most of the oscillators are trading at their extremes, a sideways movement is likely to continue till the Nifty50 index breaches the resistance of 15,900, said Ashis Biswas, Head of Technical Research at CapitalVia Global Research.
Among specific stocks, Adani Group companies were under the sell hammer for a third straight day as investors continue to dump shares following concerns over certain foreign investors in its listed entities. Shares of Adani Power, Adani Enterprises,
, Adani Transmission, Adani Total Gas and Adani Green Energy fell 4-7 per cent.
5 stocks that look solid on technical charts for short-term trading
Money-making ideas
As the Indian economy gradually opens up following a decline in Covid-19 cases, the broader market continues to outperform benchmark indices Sensex and Nifty. Analysts have warned retail investors to be selective while betting on stocks in the smallcap segment. Some companies in debt trap and heading for bankruptcy and some already there are being pushed up by the new breed of retail investors. Market history tells us that these ‘cats & dogs’ will be butchered in a bear ambush. Since valuations are high a bear ambush may happen anytime,” says Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. Here is a list of 5 stock ideas from CapitalVia Global Research and HDFC Securities.
Colgate-Palmolive | BUY | Target Price: Rs 1,870
Colgate-Palmolive has reversed from its support at 200-DMA and since then a shift in the momentum of the stock has been observed. Indicators like MACD and RSI are hinting that the momentum is likely to continue. The stock has recently given a breakout of the sideways channel as well. The analyst recommends a buy on the stock with a target price of Rs 1,870. Traders are advised to maintain a stop loss at Rs 1,530.
(Analyst: Ashis Biswas, Head of Technical Research at CapitalVia Global Research)
Coal India | BUY | Target Price: Rs 205
Coal India is currently moving in an uptrend channel. It has been trading above its 200-DMA, giving a positive outlook. The analyst expects the momentum to continue as the stock has also formed an inverse head and shoulder formation. The analyst recommends a buy with a target price of Rs 205 with a stop loss at Rs 130 for a medium-term perspective.
(Analyst: Ashis Biswas, Head of Technical Research at CapitalVia Global Research)
BASF India | BUY | Target Price: Rs 2,950
BASF broke its all-time high recently. The stock has picked up momentum since then. Momentum indicators like MACD and RSI are indicating that the momentum in the stock is likely to continue. The analyst recommends a buy on BASF with a target price of Rs 2,950. The analyst suggests traders to keep a stop loss at Rs 2,310.
(Analyst: Ashis Biswas, Head of Technical Research at CapitalVia Global Research)
CARE Ratings Ltd | BUY | Target Price: Rs 736
CARE Ratings has been in a sustainable uptrend over the last few months, according to the weekly timeframe chart. After a range-bound action in the previous two weeks, the stock has witnessed a sharp up move this week. After the upside breakout of the downtrend line at Rs 555 a few weeks ago, the stock has continued its strong upside momentum so far. The analyst has observed a larger degree of higher tops and bottoms on the weekly chart and current price movement is in line with the formation of the new higher top. But there is no confirmation of any reversal pattern at the highs, hence more upside could be in store in the near term. The volume and weekly RSI indicate further upside. The analyst has a target of Rs 736 on the stock for the next 2-3 weeks. He recommends placing a stop loss at Rs 625.
(Analyst: Nagaraj Shetti, Technical Research Analyst, HDFC Securities)
Shares of consumer facing stocks continued to add to their gains as investors looked for defensive sectors and bet on the revival of consumer spending in the coming quarters. Further, the recent steep correction in global soft commodities like crude palm oil and soya have boosted the outlook for these companies’ margins.
Shares of steel stocks were also under pressure as they dominated the list of top laggards in the Nifty50 universe. Investors looked to book profits in cyclical trades amid rising concerns that the recent run-up in the sector will limit upside potential, making risk-reward unfavourable. Shares of
, JSW Steel, SAIL and Jindal Steel ended 3-5 per cent lower.
Overall, the breadth of the market was negative as nearly two stocks fell for every one stock that rose on NSE.
