Short-term trend is negative for market

The market witnessed high intraday volatility amid escalating geopolitical tensions between India and Pakistan. The Sensex saw wild swings.After rising 397 points during the day, it fell 238.38 points and finally ended 68 points, or 0.19 per cent, lower at 35,905.The Nifty 50 index fell 28.65 points or 0.26 per cent to settle at 10,806.65.

Both the BSE Mid-Cap and Small-Cap closed in the green outperforming the Sensex.

Among the Sensex gainers were Bharti Airtel (2.43 per cent), Bajaj Auto (2.09 per cent), Larsen & Toubro (1.49 per cent), Sun Pharmaceutical Industries (1.39 per cent) and Axis Bank (1.09 per cent). Tata Motors (-3.01 per cent), Hindustan Unilever (-1.77 per cent), Kotak Mahindra Bank (-1.61 per cent), NTPC (-1.17 per cent) and Infosys (-0.94 per cent) were the major Sensex losers.

Sectors like capital goods, auto healthcare saw buying, while power consumer durable and banking stocks came under selling pressure.

Technical View
Jay Thakkar, Head-Technical & Derivatives Research & AVP-Equity Research, Anand Rathi Shares & Stock Brokers, said: “The Nifty closed in the negative territory in the last trading session and the bounce on the hourly charts is a three-wave rising structure. The momentum indicator is in the sell mode on the hourly charts, which is a negative sign in the short-term. The index has reversed from 61.8 per cent retracement level, which is a crucial level, hence the resistance on the upside is pegged at 10940 levels whereas the support is pegged at 10700 levels. So, the short-term range is of 10700-10940 and whichever side it breaks, it will lead to a 240 points move.

“The Sensex too closed in the negative territory in the last trading sessions and it too has been trading within a range of 36400-35400 levels i.e. 1000 points range and whichever side it breaks it will lead to a 1000 points move. The hourly momentum indicator is in the sell mode; hence the overall short-term trend is negative. The index has reversed from the 61.8 per cent retracement levels as well, hence the trend seems to have shifted from buy to sell.

Market View
Jayant Manglik, President-Retail Distribution, Religare Broking Ltd., said: “We expect markets to remain volatile in the near term. On the domestic front, any escalation of tensions between India and Pakistan would keep the markets volatile. Further, India’s Q3FY19 GDP numbers on Thursday would be keenly watched. Globally, the positive developments on US-China trade deal are good for the global markets, however, progress on the Brexit deal front, crude oil price and currency movement would be actively tracked by investors.

Vinod Nair, Head of Research, Geojit Financial Services Ltd., said: "The market erased opening gains due to escalation in border tensions and investors believe that volatility will continue in the short term. While 10-year yield inched higher as any war like situation will impact liquidity in the system. However, FIIs stayed positive on the domestic market whereas market participants haven’t ruled out the possibility of a slowdown in inflow if the market remains range-bound."