Markets recover from lower levels: Broader markets outperform; Globus Spirits scales to all-time high
Market Update at 10:55 AM: In a knee-jerk reaction to the US Fed statement, the Indian markets opened with a gap down.
However, the key benchmark indices recouped the bulk of the losses and were seen trading with modest losses. Nifty has recovered nearly 100 points from the day’s low. Moreover, the advance-decline ratio is in the favour of advances and this is because the broader markets have relatively outperformed.
On the stock-specific front, BF Utilities is up by more than 12 per cent along with robust volumes while Globus Spirits is also seen trading with gains of nearly 12 per cent, scaling to a fresh all-time high.
It seems that the bears would tighten their grip on D-Street on Thursday as SGX Nifty indicates a weak start. SGX Nifty plunged by nearly 93 points and was seen trading around the levels of 15,682. Blame it on the fragile global cues as US Fed signals that the rates will rise sooner and faster than expected. Meanwhile, it kept its benchmark policy rates unchanged, which was on the expected lines.
After flashing signs of exhaustion in the previous trading sessions, the bears finally got their foot in the door on Wednesday. Nifty traded lower for the majority of the session and finally, ended the day with more than half a per cent loss. Around 41 stocks out of Nifty 50 ended in the red. The broader indices too followed suit as both Nifty Midcap 100 and Smallcap ended lower by 0.93 per cent and 0.52 per cent, respectively.
Among the sectoral indices, barring Nifty FMCG & Nifty IT, all other sectoral indices ended in red, led by Nifty Metal.
The price action of the day formed a sizeable bearish candle on the daily chart as the closing was lower than the opening level and moreover, Nifty wiped out the bulk of its gains of the last few sessions. Nifty closed below the prior day low and filled the gap. Generally, a close below the Doji at a lifetime is a negative indication. After the formation of three consecutive indecisive candles, the sizeable bearish candle gave an early sign of weakness.
Having said that, on the hourly scale, Nifty has closed around the 50- simple moving average, and lastly, post the sharp sell-off, which was witnessed on June 9, the index took support around the same moving average on the hourly chart & bounced back. Hence, Thursday’s session is going to be crucial for the bulls as a failure to defend Wednesday’s session low of 15,742 could drag the index lower to the levels of 15,550-15,600. On the other hand, on the upside, the level of 15,840-15,920 is likely to act as a resistance level.