11650-11700 to act as sheet anchor for Nifty

Markets ended with modest losses on Thursday after a volatile session as banking and IT stocks came under heavy selling pressure.

Trading was choppy with the Sensex moving in a range of 307 points and the Nifty touched a high of 11,789 and low of 11,699 before ending in the red.

The Sensex ended 50 points lower at 38,981 and the Nifty shed 23 points to close at 11,725.

The mid- and small-cap shares also faced selling pressure as the MidCap Index declined 0.61 per cent, while SmallCap Index was down 0.21 per cent.

Most  Asian markets (other than Japan and China markets which had holidays) have closed on a mixed note. European indices like FTSE and CAC are trading in  the red. Technically, the Nifty is consolidating in a range and further upsides  are likely in the near term once the immediate resistance of 11797 is taken out, analysts said.

Stocks like ICICI Bank, Infosys, Tata Consultancy Services, IndusInd Bank and Axis Bank saw heavy selling.

Yes  Bank  bounced back closing 3.4 per cent higher after seeing its biggest 1 day percent  fall on the previous session, while Bandhan Bank rose 4.2 per cent after it reported better results.

Analysts said the consolidation was broad based as manufacturing activity eased in April due to general election. On the global front, markets were mixed as FED stay patient on key rates while soft inflation added anxiety and market participants are focused on upcoming job data for more cues.

Technical View
According derivative analysts, in F&O space, there was mixed activity in both Nifty as well as Bank Nifty futures, while, traders were quite active in index options due to weekly expiry.

“In the coming weekly series, the build-up was scattered between 11750-12000 call and 11500-11800 put options. Whereas, maximum open interest concentration stood at 11800 call and 11700 put options. As far as outstanding contracts are concerned, decent amount of longs formed in April series are still intact in the system.  Going ahead, 11650-11700 would act as a sheet anchor for the index; whereas, the hurdle is place around 11800 mark,” said Sneha Seth Derivatives Analyst, Angel Broking.

Volatility remained high on the broader front as stocks continue to react on earnings announcements and monthly auto sales data.

“We feel this scenario is not going to change anytime soon and traders should prepare themselves for more volatile swings ahead. The support for Nifty has shifted from 11,500 to 11,600 while the hurdle is intact at 11,800. We advise focusing on trade management and preferring hedged positions,” said Jayant Manglik, President - Retail Distri-bution, Religare Broking.

Market View
Hemang Jani, Head - Advisory, Sharekhan by BNP Paribas, said: "As we enter the final stages of the 2019 general elections, one can expect the volatility in the market to remain high. Q4 FY19 earnings so far has been lacklustre, slowdown in sectors such as consumption and auto has hurt investor sentiments.