Dalal Street Corner: Market Posts 2-Day Winning Streak Amid Profit Bookings; what should investors do on thursday?

After a two-day winning streak, the domestic stock market closed with a marginal loss amid the profit booking on Wednesday. The broader Nity50 and Sensex fell 0.12% and 0.20% respectively, with the 50-stock index closing below 16,250 and the latter near 54,200. Following the benchmarks, Nifty mid cap and small cap closed down 0.2% and 0.4% respectively.

Meanwhile, FMCG, Pharmaceuticals and Healthcare gained as much as 1.25%, preventing the market from slipping further. Outside of these sectors, all Nifty sector indices closed in the red, with Realty and PSU Bank taking the maximum hit.

“With support from pharma and FMCG stocks, the domestic market saw a steady run to the weak European market open. Soaring retail inflation in the UK as well as assurance from the chairman of the Fed to lower inflation, have disrupted sentiment, risking larger rate hikes,” said Vinod Nair, head of research at Geojit Financial Services.

With the prospect of a significant hike in interest rates by global central banks, investors are advised to allocate a higher weighting to sectors that are less affected by such policies such as defensive ones, Nair suggested.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan of BNP Paribas, opined that the short-term pullback was still intact and that Nifty could attract buying interest around 16,200.

“The Nifty opened on a positive note and attempted to build on this positive momentum. However, on the upside it stumbled near 16,400 where it attracted profit bookings,” Gaurav said.

The internal structure of the recent rise shows that today’s negative close is a minor pause and the short-term pullback is still intact, he said.

Ratnaparkhi was of the view that the index should experience new buying support around 16200. “Thus, this minor dip can be seen as a new buying opportunity from a short-term trading perspective. On the higher side, the short-term target is pegged at 16,500. The 16,000 level will act as short-term support,” he recommended.

Nifty found resistance at the crucial resistance at 16400 and slipped below, closing with a marginal loss, said Rupak De, senior technical analyst at LKP Securities.

On the daily chart, the index remained well below the short-term moving average, he said.

“The daily RSI is in the bullish crossover. The trend should remain sideways in the short term. Resistance at the upper end is placed at 16,400. At the lower end, support is visible at 16,000,” Rupak added. Of.

Meanwhile, FIIs continued their selling spree by selling shares to the tune of Rs 2,192.44 crore in the Indian market on Tuesday. Furthermore, they have remained net sellers so far in the month with a sales figure of Rs 36,682.40 till May 17.