The Nifty Bank, which touched a fresh record high of 56,161 in early trade, also reversed gains to end 303 points lower at 55,600, as profit-taking emerged in financial stocks.
The Nifty Realty index added 1% amid hopes of a rate cut by the Reserve Bank of India (RBI) in its upcoming policy review June 6. The RBI may reduce the interest rate for the third consecutive time in its next monetary policy meeting (MPC).
Oil & Gas was the worst performing index, while Nifty Realty was the top performing index. The broader market also remained under pressure, with the Nifty Midcap 100 falling 0.45% to 57,517
Baring Realty and Media, all sectoral indices closed in red and amongst them private banks, financial services and oil & gas sector fell the most.
The Nifty Smallcap100 index once again showcased its outperformance relative to the benchmark by rising 0.10%.
Fertiliser stocks saw a rally in Tuesday’s trading session, buoyed by a confluence of favorable global policy developments and optimistic domestic weather forecasts. Several major fertiliser companies have seen gains of up to 15% during Tuesday’s session.
Meanwhile, foreign investors were net sellers in the cash market on Tuesday, while domestic investors were net buyers.
The market has been moving within a broader high low range over the last couple of weeks within 24,500-25,000 levels and the Nifty is currently placed at the lower range, said Nagaraj Shetti of HDFC Securities.
He said that further weakness below from here could open more weakness down to the next supports of 24,400-24,300 levels. Any upside from here could find resistance around 24,800 levels.
According to Rupak De of LKP Securities, the Nifty has extended its consolidation phase for yet another day, showing no urgency in establishing a clear directional trend. It appears that investors are awaiting a decisive commentary following the RBI’s interest rate decision.
“Technically, very short-term support is placed at 24,500. A fall below this level may trigger an increase in short positions, potentially leading to a swift decline towards 24,000. On the other hand, if the Nifty holds above 24,500, it could see a recovery towards the 24,700–24,750 zone in the near term,” De added.
Devarsh Vakil of HDFC Securities said the Nifty has violated its 20 days EMA and SMA on closing basis, which is bearish signal for the short term. However, breaching previous swing low of 24,462 could intensify the selling pressure going ahead.
Below 24,462, the Nifty could slide down towards 50 Dema support placed near 24,185. Resistance for the Nifty has now shifted down to 24,845.
