Nifty formed a Doji pattern on the daily chart as the closing was near its opening level.
A Doji candle indicates there is some indecisiveness among the bulls and the bears and bounces were being sold in the absence of follow-up buying interest.
Nifty opened gap down at 15754 and remained under pressure throughout the session. It extended losses in the afternoon to hit the day's low of 15707 before closing at 15752, down 171 points or 1.07 percent.
Bears were in control of the Nifty and closed a percent lower, due to selling in banking & financials, auto, metals, and select IT stocks.
Shadowing global sell-off, Indian indices slipped succumbing to world inflation woes, FOMC meeting next week and rising COVID cases. Banks led the domestic downtrend as initial quarterly results pointed to cautious asset quality due to the impact of the second wave. Slackening economic growth in the US led to reports of likely downgrade in growth forecast in the current year triggering global sell-off.
In the next session, Nifty needs to defend the low of 15707 as failure to do so shall initially drag it down towards 15630. If the index sustains above 15707, it should ideally move sideways which should facilitate a bounce into the zone of 15836/15882.
With this sharp fall, Nifty once again appears to have entered into a sideways phase whose lower end seems to be placed around 15630 level.
For the time, it looks prudent to remain neutral on markets but intraday Traders with a high risk appetite are advised to go short below 15700 and look for a modest target of 15630 by placing a stop above intraday high.
All sectoral indices, barring Nifty Pharma and realty, ended in the red. Nifty Private Bank, bank and financial services fell up to 2 percent.
Bank Nifty formed a Doji candle on daily chart and negated its higher highs higher lows of the last five sessions.
Bank Nifty opened gap down at 35070 and after an initial recovery, it remained under pressure for most of the session.
Banking stocks have been underperforming and facing pressure but the index managed to close above 35000.