Poll result excites market, Sensex misses 36,000

It was a roller-coaster day for the Indian stock markets in the lieu of the Karnataka assembly election results. Expecting a win for BJP, the Indian benchmark indices witnessed a dynamic impulse with Nifty and Sensex almost hitting their psychological levels of 10,950 and 36,000, respectively. However, the move lasted for only an hour and the markets retreated to close on a flat to negative note.

The retreat from just below the psychological level started after the news that the Congress has patched up an alliance with JD(S), with this, the markets ended flat to negative. Meanwhile, CM Siddaramaiah is likely to resign from the post of Chief Minister. There is also a jinx that the party that wins in Karnataka loses the general elections; though its a superstition historic data shows the same.

Coming back to the markets, broader indices remained subdued and underperformed while Mid-cap and Small-cap indices closed 0.8 and 0.65 per cent down, respectively. Among the sectoral indices, PSU Banks and Realty dragged the markets the most, falling nearly 2 per cent each. Overall the market breadth remained slightly weak with 1,025 advances and 1,615 declines on BSE.

Benchmark index Nifty hit above its major resistance of 10,910 but failed to hit 10,950 and turned back from 10,929. Nifty gave up its entire intraday gain and finally ended 4 to 5 points down from its previous close. Nifty just failed to give the long awaited Cup and Handle pattern breakout of 14-period RSI at 68 levels. Going forward, above 10,855-10,875, we hold 10,950 followed by 11,000 as the next resistances. On the downside, 10,765-10,725 followed by 10,600 act as supports.