Nifty snaps three-session winning streak

The Nifty index ended its three-day winning streak on Monday, slipping 89 points to close at
26,239. The session began on a positive note, opening 5 points higher, and extended gains
during the first two hours of trade. However, selling pressure intensified after 11:15 a.m.,
dragging the Nifty more than 150 points from its intraday high to hit a low of 26,210 around
2:30 p.m.

Nestle, BEL, Eicher Motors and Hindustan Unilever led the charge, emerging as the top gainers in the Nifty pack. In contrast, HDFC Bank and IT heavyweights Wipro, Infosys, and HCL Tech bore the brunt of profit-taking, ending as top laggards.

Sectoral performance was mixed bag. Amongst them, Realty, Consumer durables, and FMCG
ended with most gains. On the other hand,IT, Healthcare, OIL/Gas and Pharma fell the most.

The broader market presented a divergent picture. While the Nifty Midcap 100 softened by
0.16%, the Nifty Smallcap 100 bucked the trend, rising 0.53% for its second consecutive day of
gains. Advance-decline ratio on BSE slipped to 0.68, signaling a break in the positive breadth
seen over the last three days.

On the currency front, the Indian rupee weakened for the fourth session in a row, depreciating 8
paise to 90.28 against the US dollar. The currency has now declined in nine of the past ten
trading sessions, weighed down by uncertainty over potential trade negotiations between
Washington and New Delhi. Furthermore, a surge in geopolitical uncertainty has enhanced
demand for the US dollar as a safe-haven asset, following the reported detention of Venezuelan
leader Nicolás Maduro by US military forces over the weekend.

Despite profit-booking at higher levels, the Nifty held comfortably above its 5-day EMA,
currently placed at 26,188 , signaling that the short-term bullish undertone remains intact. As
long as, index sustains above the crucial support zone of 26,100, the near-term trend is
expected to stay positive. On the upside, today’s high of 26,373 is likely to act as an immediate
resistance. A decisive move above this level could rekindle buying momentum, paving the way
for a potential rally towards the 26,500.

Disclaimer : This content is only for informational purpose. It does not make any recommendation to act or invest.

Source: HDFC Securities Prime Research