Markets drag for second straight day on weak global cues; here’s what investors should do on Friday

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Indian benchmarks, Sensex and Nifty ended lower on Wednesday dragged by heavy selloff in metals, IT, private banks and financial services stocks. Continuing the downtrend for the second day in a row, markets settled lower amid weak global cues.

Asian markets declined tracking surging commodity prices and growing inflationary pressure in the US dragging SGX Nifty as well.

The Sensex ended 471.01 points or 0.96% lower at 48690.80, while the Nifty dropped 154.30 points or 1.04% at 14696.50.

Broader markets also ended lower for the day with the  midcap and smallcap indices on the NSE down 0.81% and 0.59% respectively.

Among sectoral indices, Nifty Metal cracked 3%, while banks and IT were the other big laggards. All sectoral indices on the BSE except auto ended the day in the red.

Tata Steel, Hindalco Industries, JSW Steel, IndusInd Bank and HUL were among the top losers on the Nifty. Gainers included Tata Motors, Titan Company, Maruti Suzuki, Power Grid Corp and UPL.

Overall market breadth was mildly positive. 1,682 scrips traded higher on BSE against 1,248 that moved lower. On NSE, 1,071 stocks advanced while 810 declined.

Vinod Nair, Head of Research at Geojit Financial Services said, “Indian indices extended its losses due to concerns over hike in global interest rates and bond yield due to rising commodity prices and inflationary pressure. All major indices belled the day in negative terrain including metals, while PSU banks and media stocks managed to stay afloat. International commodity prices will have to stabilize, to provide sustenance in the equity market.”

Equity, derivatives and currency markets will remain closed on Thursday on account of Eid-ul-Fitr (Ramzan Eid). Commodity markets will be closed in the first half and trading will take place only in the evening session.

Here’s how experts see markets trading on Friday

Manish Shah, Founder, www.Niftytriggers.com

Nifty closed the day lower as most international markets declined on Wednesday’s trading. By expiry day standards it was still a low volatility day. Nifty trades in a band of 15,050 on the higher side to around 14,450-14,480 on the lower side. Nifty has made repeated attempts to move beyond the resistance at 15,050 but the market fails to break and trade beyond this level. Support for Nifty is at 14,620 and below that to 14,480-14,450. A break below 14,620 and Nifty will trade lower towards 14,480-14,450.

On the upside, the resistance is at 15,050 which needs to be taken out. Should Nifty decline to 14,450-14,480 it will be an opportunity to buy as this is a support zone. Buying on declines to this could mean a bump up to 15,050. At least we have a good risk-to-risk ratio. With only one day to go for completion of the week; How the market behaves on Friday will depend on how the US behaves over the next two days.

Chandan Taparia, Derivatives Analyst, Motilal Oswal Financial Services

The Nifty has to cross and hold above 14,750 zones to witness stability and an up move towards 14,900 then 15,000 zones, while on the downside support exists at 14,600 and 14,500 zones,” said