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Global Weakness Drives Marginal Decline In Equity Markets

Tracking negative cues from global peers, benchmark equity indices closed marginally lower in a volatile market on Tuesday, dragged by IT and banking stocks, amid constant foreign outflows

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Dear Trader –

The 30-share BSE benchmark Sensex declined 78 points or 0.12 per cent to settle at 65,945. The broader NSE Nifty Future dropped 35 points or 0.18 per cent to end at 19,666.

From the Sensex pack, Tech Mahindra, Infosys, Asian Paints, ICICI Bank, and Kotak Bank closed with cuts, while Nestle, Tata Steel, M&M, Bajaj Finance, and HUL closed higher.

Nifty IT index fell 0.54 per cent on fears of a delayed demand recovery in the US due to higher interest rates. Mphasis, Coforge, Tech Mahindra and Infosys were the top losers. Nifty Bank also declined 0.32 per cent, dragged by Bank of Baroda, PNB and Indian Bank.

In the broader market, Nifty Midcap100 fell 0.17 per cent, while smallcap 100 rose 0.57 per cent. The market breadth was skewed in favour of the bulls. About 1,803 stocks gained, 1,861 declined, and 129 remained unchanged on the BSE.

FII and FPIs, on Tuesday, saw a net sales of Rs.693.47 crore in the cash segment. A total of Rs.9444.28 crore was sold against a total purchase of Rs.8750.81 crore. Domestic institutional investors saw a net purchase of Rs.714.75 crore in the cash segment. A total of Rs 6787.72 crore was sold against a total purchase of Rs.7502.47 crore.

Meanwhile, Trading remained flat as headwinds from the global market and continued selling by FIIs kept domestic investors under vigil. While bargain hunting was visible in small-cap stocks due to the recent correction and favourable valuation compared to large and mid-caps, IT indices slid due to the fear of one more rate hike by the Fed and a consequent reduction in spending.

Technically, the important key resistances placed in August Nifty future are at 19666 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 19707 – 19808 levels. Immediate support is placed at 19570 – 19505 levels.

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Nikhil Bhatt | Research Analyst

The author is a well established entrepreneur having a more than 16 years of experience in the field of stock market and financial management.

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