Weakness could continue for a few more sessions

It was a subdued trading session with the domestic market ending lower amid volatile trading. The Sensex ended 71.07 points, or 0.21 per cent lower at 33,703.59 while the Nifty 50 shed 18 points, or 0.17 per cent to settle at 10,360.40. Key indices fell for third straight day as the sentiment took a hit following the banking sector scam.

The BSE Mid-Cap Index fell 0.06 per cent and the Small-Cap declined 0.15 per cent, both outperforming the Sensex. Among the sectoral indices, the BSE Bankex was down 0.61 per cent and Realty was down 0.64 per cent.

Technical view

Mustafa Nadeem, CEO, Epic Research, said:  The Nifty ended down for the third consecutive day. It will be critical to see if buying is returning to the market at lower levels to validate the internal strength. If we see a close below 10,350 in next few days then we may be going in for a deeper correction where price may see a downside and move to 10,100-9,900.

Market view

Jayant Manglik, president, Religare Broking, said: The bears continued to dominate, as the equity benchmark indices registered a negative closing for third straight session, led by weak global cues and sharp slide in INR. The Nifty showed resilience in the first half and traded in the green, but faced stiff resistance at higher levels, as it slipped from an intra-day high of 10,429 in the last hour of trade to close lower at 10,360.

The imposition of the LTCG tax, the higher fiscal deficit target in the Union Budget and the recent alleged PNB scam have clearly impacted the sentiments on the domestic bourses, as evident from the fact that the indices have corrected sharply by around 8-9 per cent from their record highs over the last three weeks. This weakness could continue for a few more sessions, led by uncertain global cues and muted domestic sentiments. However, any further correction at this juncture should be considered as a healthy buying opportunity for investors in quality companies with strong financials and bright outlook. Meanwhile traders should remain cautious and keep their positions hedged, as volatility is likely to remain high.

—Ashwin Punnen