Sensex slips 215 points, Nifty below 10,650; HDFC Bank top loser, tanks 3%
Anand James, Chief Market Strategist, Geojit Financial Services
With NPA sale and merger plans gaining traction, banks swung the benchmark indices viciously even as investors took a cautious stance ahead of RBI rate decision. Markets so far have been riding on earnings and macro positivity, as well as monsoon cheer, but there is a fair expectation of RBI to move rates higher, with oil persistently firm.
HDFC Bank posts sharpest intraday fall in six weeks
HDFC Bank, the largest bank by market capitalisation, posted sharpest intraday drop in 6 weeks, and technicals suggested the end of uptrend. The stock fell as much as 2.49 per cent to Rs 2,058, in its sharpest intraday drop since April 23.
The stock has reversed its course after testing a resistance at Rs 2,155.88, the 38.2 per cent Fibonacci projection level of the uptrend from November 25, 2016 low to February 1, 2018 high.
Market Reverses Course
Indian shares rose in early trade on Monday on upbeat global cues, before reversing course on concerns ahead of the central bank’s three-day interest rate-setting meeting. The Reserve Bank of India (RBI) is expected to hold rates, according to the median forecast in a Reuters poll, while about 40 percent of the economists polled expects a hike.
HDFC Bank: Foreign investors (FIIs) are expected to buy up to 4.35 crore share of the private lender as the FII limit has gone down to 72.32 per cent from the allowed limit of 74 per cent. HDFC Bank stock is quite popular among FIIs.
Target: Rs 960
Stoploss: Rs 920
- Cash delivery 55% in the stock
- Closing at key level of Rs 930
Asian shares edged up on Monday as strong U.S. jobs data offset worries that tariff wars between the United States and the rest of the world could drag global economic growth lower. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent while Japan’s Nikkei rose 1.0 percent.
On Wall Street on Friday, U.S. tech shares soared, pushing up the Nasdaq Composite 1.51 percent to 7,554, near its record closing high of 7,588 marked in March. In contrast, S&P 500, which rose 1.08 percent on Friday, was still about 140 points off its record peak of 2,872 set in January as concerns about trade frictions curtailed many other shares, including industrials.
Wall Street on Friday
Wall Street stocks rose on Friday after the latest monthly jobs report pointed to strength in the U.S. economy and political tensions in Italy eased. Technology stocks led the rally, with gains in behemoths such as Apple, Microsoft and Alphabet lifting the S&P tech index to a record intraday high.
The Dow Jones Industrial Average rose 182.63 points, or 0.75 percent, to 24,598.47, the S&P 500 gained 24.27 points, or 0.90 percent, to 2,729.54 and the Nasdaq Composite added 96.37 points, or 1.29 percent, to 7,538.49.
On Friday, the Sensex and Nifty settled lower as optimism over robust growth data was tempered by renewed concerns of a global trade conflict. Profit-booking in power, utilities and banking stocks offset gains in auto counters, which spurted following upbeat sales figures for May.
The Sensex ended at 35,227, down 95.12 points, while the broader Nifty50 was ruling at 10,696, down 39.95 points. Broader markets underperformed with the BSE Midcap and the BSE Smallcap indices slipping up to 1.5 per cent.