HDFC Securities says Indian benchmark equity indices ended lower for the fourth consecutive day on February 19 with selling seen across the sectors. After making an intra day high at 1030 Hrs, Nifty kept falling through the day, barring the recovery post 1500 Hrs. At close, the Nifty was down 137 points or 0.91% at 14982. For the week, the Nifty closed down 1.2%.
 
Volumes on the NSE were above recent average. Among sectors, PSU Bank, Auto, Bank, Infra, Metal and Pharma indices were the main losers.
 

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Asian stocks pulled back from all-time peaks on Friday as higher longer-dated bond yields and disappointing U.S. jobs and economic data dented investor confidence in a faster economic recovery from the COVID-19 pandemic. Euro zone shares rose on Friday as data showed factory activity in February jumped to its highest in three years. Strong demand for manufactured goods helped the factory PMI soar to 57.7 from 54.8, the highest since February 2018 (vs 54.3 forecast). A PMI covering the euro zone’s services industry fell to 44.7 from January’s 45.4 (vs 45.9 forecast). IHS Markit’s flash composite PMI, registered 48.1 in February compared to January’s 47.8 and 48 forecast.
 
Nifty has corrected for four straight days after a sharp consistent rise seen over the past few weeks. The oscillators/indicators have now eased out of the overbought region. A move above 15030-15060 early next week could take the Nifty 15240 over the next few days. On falls, 14753-14900 could act as a good support in the near term.
 
The weakness continued for the fourth consecutive sessions in the market on Friday, Nifty closed the day lower by 137 points. Nifty opened on a negative note, made an attempt to move up in the early part of the session. The weakness intensified in the afternoon and Nifty closed the day with an upside recovery note.
 
A reasonable negative candle was formed with minor upper and lower shadow. Technically this pattern indicates a continuation of weakness amidst a range movement or volatility. The Nifty on the daily chart broke below the immediate support of 10 day EMA at 15085 levels and sustained above the next lower support of 20 day EMA at 14870.
 
The recent positive sequence like higher tops and bottoms is now placed at the danger of negation, as Nifty moved below the recent higher bottom of 14977 of 10th Feb, made a new swing low of 14898.20 and closed higher. Hence, this could mean that ongoing downward correction could continue in the near term.
 
Conclusion: The short term trend of Nifty continues to be weak. The late hour upside recovery of Friday could signal a possibility of a minor upside bounce in the coming session. However, a decisive move below 14950 could result in further weakness down to 14700-14500 levels in the near term. Immediate resistance is placed at 15115.