A close below 7850 may mean that the uptrend since 15th December is over for now
We had mentioned in Tuesday’s closing report that Indian stock market benchmarks Nifty, Sensex are currently directionless and Nifty will weaken on close below 7,850. The indices, opened flat on Wednesday and traded close to previous day’s closing up to 1.30pm. After which it lost its strength and moved lower and closed in the red wiping off almost half of the past two day’s gain.
Unwinding of long positions ahead of the derivatives expiry, coupled with profit bookings, subdued Indian equity markets on Wednesday.
Initially, both the bellwether indices of the Indian equity markets opened on a flat note in sync with their Asian peers.
Nevertheless, expectations that Nifty will breach the 8,000-level mark and a positive close of the US markets on Tuesday due to healthy consumer confidence data pushed up prices.
However, markets soon ceded their gains, as lack of investors' participation coupled with unwinding of long positions ahead of the futures and options (F&O) expiry depressed sentiments and prompted some investors to book profits at higher levels.
Latest data with the stock exchanges showed that the volumes in cash markets across key bellwether indices eased to Rs17,000 crore on Tuesday.
Besides, investors were seen cautious regarding the upcoming third-quarter earnings season, which starts from 14th January.
Foreign institutional investors (FIIs) were net buyers in the day's trade, whereas domestic institutional investors (DIIs) were net sellers.
According to data with stock exchanges, FIIs invested Rs152.2 crore, while DIIs sold stocks worth Rs74.41 crore.
In spite of foreign inflows into Indian equities, the rupee closed flat during the day's trade. It closed at 66.39 to a US dollar from its previous close of 66.40 to a greenback.
Sector-wise, heavy selling was witnessed in information technology (IT), banking and automobile stocks.
The S&P BSE IT index plunged by 133.97 points, banking index receded by 84.22 points and automobile index declined by 55.13 points.
On the other hand, metals, fast moving consumer goods (FMCG) and telecom scrip gained.
The S&P BSE metal index gained by 20.16 points, FMCG index slightly rose by 9.15 points and telecom index was up by 6.67 points.
The top gainers and top losers of the major indices are given in the table below:
The closing values of major Asian indices are given below: