UMBAI: Benchmarks were under intense selling pressure on Wednesday breached 200 Daily Moving Average as sentiments in global markets turned bearish after Germany banned short-selling in some government bonds and stocks.
At 2:28 pm, Bombay Stock Exchange’s Sensex was at 16454.75, down 421.01 points or 2.49 per cent. The index hit intraday low of 16414.65 and high of 16802.39.
National Stock Exchange’s Nifty was at 4940.60, down 125.60 points or 2.48 per cent. The index touched intraday low of 4919.45 and high of 5065.10.
The index has breached its 200 DMA of 4988. This is the second time in the week that the index has tested its crucial support levels. According to analysts, the concern will begin if the index closes below 200 DMA for at least two consecutive sessions which may trigger more short positions.
BSE Midcap Index was down 2.07 per cent and BSE Smallcap Index slipped 1.97 per cent lower.
All the sectoral indices were in the red. BSE Metal Index fell 3.70 per cent, BSE Realty Index tumbled 3.69 per cent and BSE Bankex slipped 3.52 per cent.
Sterlite Industries (-6.76%), Tata Motors (-5.80%), ICICI Bank (-5.62%), Jaiprakash Associates (-5.29%) and M&M (-5.28%) were amongst the major Sensex losers.
Hero Honda (0.86%), was the lone index gainer.
Market breadth was negative on the BSE with 1110 losers against 189 gainers.
Meanwhile, the European shares were in deep red by losses in the financials. FTSE 100 was down 2.62 per cent, CAC 40 fell 3.01 per cent and DAX fell 2.81 per cent.
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Bluechips below 200DMA: To buy or not to buy
MUMBAI: Stocks have been under pressure for some time now due to fundamental reasons pertaining to their respective sectors as well as due to economic uncertainties in the global markets.
On Monday, traders heaved a sigh of relief as the Nifty bounced back after briefly slipping below its 200-Daily Moving Average of 4980. Index heavyweights like Reliance Industries and ONGC, which pulled the Nifty down, too have slipped below their 200-DMA. The 200-DMA is a historical tool and indices or prices don’t breach this level on the downside very often. If the price stays above 200-DMA, it’s a bullish sign, whereas a move below it signals a bearish sentiment. “Given global concerns, most of the stocks have underperformed for good reason and should be left out. Weakness in index heavyweight Reliance Industries appears as a precursor to some correction in coming days. If the market stays below 5000 levels then we might see 4600 on the Nifty,” said Sandeep J Shah, CEO, Sampriti Capital. List of the biggies that are significantly below their 200 DMA
The stocks may have fallen temporarily and look bearish on the charts. However, they can be picked up at current levels for the long-term period of over a year. “Investors can enter these stocks at current levels for a holding period of minimum one year. Investors can put 25% of the funds at these levels and wait to accumulate at lower levels,” said Ajay Parmar, head of research at Emkay Global Financial Services. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Src: Economictimes.indiatimes, Moneycontrol.com
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