Analyst Somesh View - Closing Comments on 27th JULY 2021

2021-07-27 18:23:57 By Somesh

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Nifty formed a bearish candle on the daily chart as the closing was lower than the opening level.

Nifty started off on a positive note at 15860 and hit an intraday high of 15881 but erased all gains in the afternoon to sink to the day’s low of 15701 before signing off the session at 15746, down 78 points.

In a volatile session, Nifty wiped off all the day’s gains in the afternoon to fall sharply before narrowing the losses to half a percent at the close. All sectoral indices, barring metals and PSU banks, closed in the red.

Stocks gave up gains today as investors were nervous on the selling across Chinese Markets by global funds coupled with the policies of the Chinese Authorities and the likely impact on Indian Markets despite knowing that it is also a positive for India. While we did see profit booking across banks and the pharma pack on account of negative newsflow on few pharma names, certain pockets across the broader market like textile exporters & coffee stocks posted smart gains on the back of rising coffee futures.

For the umpteenth time, Nifty has yet again faced strong headwind on approaches near 15914. Benchmark index has given up all of its early session gains to turn red, weighed by profit-booking across sectors, most notably among the pharma stocks. A strong sell-off among Chinese and Hong Kong markets have also added to woes. Meanwhile, metals and PSU banks are the only sectors that are trading noticeably in green at present.

Tussle is still on over the next directional move in the index and there’s no clear indication yet. Excessive volatility due to prevailing earnings season and upcoming monthly expiry of derivatives contracts are further adding to the participants’ worries. We reiterate our view to restrict leveraged positions and wait for clarity.

Nifty witnessed a sharp correction for the day it might not have altered the structure of prevailing trend which is still sideways, between 15914/15578 level, for the last 29 trading sessions. Hence, unless the index registers a close below 15578, a major downswing in the near term can't be witnessed.

Traders have no other option but to confine themselves to the fence.

Sector Wise : - Except metal and PSU Bank all other sectors ended lower with Nifty pharma index down over 4 percent. Midcap and smallcap indices also ended in the red.

Bank Nifty formed a bearish candle but continued forming higher highs for the fourth session in a row.

Bank Nifty opened positive at 35029 but could not sustain at higher level. Follow up buying interest was missing and the banking index drifted lower to the day's low of 34713. Bank Nifty closed below its 50DMA with losses of 152 points at 34797


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