Tracking a decline in Asian peers, Indian equity indices snapped a three-day winning streak and closed in the red on Monday in volatile trade, dragged by banking, financial and IT shares.
On consolidation after the recent rally, the BSE benchmark Sensex declined 169 points or 0.24% to settle at 71,315, while NSE Nifty fell 38 points or 0.18% to end at 21,418.
Nifty Banks and Financial Services lost 0.6% and 0.4%, respectively, after rising 2% each in the last two sessions. Information technology stocks fell 0.3%, snapping a two-session rally in which the index rose about 8%.
The market breadth was skewed in favour of the bulls. About 2,175 stocks gained, 1,712 declined, and 141 remained unchanged on the BSE.
Expert Views
“The market started on a subdued note as concerns over oil supply disruptions through the Red Sea and elevated valuations dented investor sentiment. On the global front, attention will be directed towards BOJ monetary policy and UK inflation data,” said Vinod Nair, Head of Research at Geojit Financial Services.
“We expect a near-term consolidation in the market due to an unfavourable risk-reward after the recent rapid performance, concerns over El Nino, and a slowdown in world GDP,” Nair added.
Rupak De, Senior Technical Analyst at LKP Securities, said, “On the daily chart, the Nifty has formed a Bearish Harami candlestick pattern, suggesting a potential interruption in the ongoing rally. Additionally, the RSI indicator on the hourly timeframe has undergone a bearish crossover within the oversold zone, hinting at a waning bullishness in the market. A decline below 21,350 could lead to a correction towards 21,220/21,100 in the short term. Conversely, resistance is anticipated at 21,500 on the higher end.”
Global Markets
Asian shares were mostly lower on Monday as the Bank of Japan began a 2-day meeting that investors are watching for hints of a change to the central bank’s longstanding near-zero interest rate policy.
Tokyo’s Nikkei 225 index lost 0.6%, Hong Kong’s Hang Seng ended 1.1% lower and the Shanghai Composite index sank 0.5%.
Meanwhile, the pan-European STOXX 600 edged 0.1% lower, after logging a five-week winning streak since April as the Federal Reserve’s dovish pivot last week boosted rate cut bets.
Crude Oil
Oil rose on Monday as attacks by the Houthis on ships in the Red Sea raised concerns of oil supply disruptions and Russia’s plan to lower exports in December provided additional support.
Brent crude futures were up 17 cents, or 0.2%, to $76.72 a barrel, while US West Texas Intermediate crude rose 48 cents, or 0.7%, to $71.91.
Rupee Strengthens
The Indian rupee climbed to a near three-month high on Monday, helped by custodial banks selling dollars, before being pulled back by dollar demand from importers to end marginally weaker.
The rupee ended at 83.06, against 83.00 at its previous close. The local currency had climbed to 82.915 during the session, its highest since September 22.
(With inputs from agencies)
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