Market ends in marginal losses; 82 smallcap shares down 10-23%
According to popular Exness Asia, Nifty formed a bullish candle on the daily scale on Friday, but a bearish candle similar to a shooting star on the weekly scale.
India's indexes continued to make new record highs, but ended last week with small losses due to metal, real estate and banking sector selling.
The benchmark indices, Sensex and Nifty, hit new record highs of 56,118.57 and 16,701.85 on August 18, but for the week the BSE Sensex fell 107.97 points to close at 55,329.32 and Nifty50 lost 78.6 points to close at 16,450.5.
The broader indices lost ground to the major indices, with the BSE mid-cap and small-cap indices down 1-2 per cent and the large-cap index down 0.7 per cent last week.
Among smallcap companies, 82 stocks fell 10-23 per cent, including Ujjivan Small Finance Bank, Apex Frozen Foods, Indostar Capital Finance, RattanIndia Power, Sandur Manganese, Centrum Capital and Jaiprakash Power Ventures.
However, VST Tillers Tractors, FIEM Industries, Adani Total Gas, Fortis Healthcare, Aster DM Healthcare, Mindtree and Arvind Fashions added 11-40%.
"The 16800 level, which was earlier our medium-term target, now becomes the short-term target and the medium-term target has been upgraded to 17500. Hourly and daily momentum indicators are now showing overbought; so a slight pause cannot be ruled out; however, the overall pattern shows that the rally is far from over," said Gaurav Ratnaparkhi, Head, Technical Research, Sharekhan, BNP Paribas.
"Thus, short-term traders are advised to hold their long positions and move along the trend for higher targets. On the other hand, the nearest support zone is shifting higher to 16350-16400," Ratnaparhi added.
The BSE 500 index fell almost 1 per cent, led by Ujjivan Small Finance Bank, Indostar Capital Finance, Vedanta, Ujjivan Financial Services, HFCL, Jindal Stainless, Kaveri Seed Company, Welspun Corp and Jindal Stainless (Hisar).
"After witnessing a magnificent rally during the first two sessions of the week, markets have since witnessed profit taking amid concerns over inflated valuations and lack of new positive factors," said Srikanth Chouhan, executive vice president, technical research, Securities. Kotak Securities.
"Technically, the Nifty has formed a falling star reversal and at the same time, momentum indicators also point to a temporary overbought situation. Nevertheless, the medium-term texture remains bullish and any meaningful short-term correction could provide an opportunity to enter the long side."
"On the other hand, a key support zone would be 16350 and the 20-day SMA or 16200. On the other hand, the 16600/16665 level could be an immediate hurdle for the index. If the index falls below 16200 or 20-day SMA levels, the medium-term uptrend could be vulnerable," said Chouhan.
Where is the Nifty50 heading?
The possibility of the US Federal Reserve cutting stimulus measures will start as early as this year, spooking markets across the globe, including ours. In addition, participants also noted a sharp rise in COVID cases globally, which added to the pressure. Next week, we may see further declines and the Nifty could test a level closer to 16,200," said Ajit Mishra, vice-president, research, Religare Broking.
"In case of a rebound, the 16,550-16,700 zone will be an obstacle. Considering the scenario, we suggest keeping positions on both sides and prefer the major indices over the rest," Mishra added.
On Friday, Nifty formed a bullish candle on the daily scale but a bearish candle similar to a shooting star on the weekly scale.
"It should now continue to hold above the 16450-16500 zones to extend momentum towards the 16600 and 16700 zones, while lower support is seen at the 16350 and 16200 levels," said Chandan Thaparia, vice president | Derivatives Analyst at Motilal Oswal Financial Services.
"The market is showing that it is crucial for the short-term market scenario to stay above the Nifty50 index level of 16500. There are early signs of market reversal with deviation emerging in the Nifty 50, mid-cap Nifty and small-cap Nifty, so traders are advised to refrain from creating a new buy position until we see further market expansion." said Ashis Biswas, head of technical research at CapitalVia Global Research.
"If the market fails to hold at 16500, the market may see lower levels of 16350," he added.
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