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Sensex, Nifty snap five-day rally as rising virus cases hit recovery hopes

Overseas, most Asian counterparts, barring Kospi and Nikkei bounced back from lows and were trading back in positive territory. However, led by fall in Wall Street, European stocks continued bearish trend over gloomy economic forecast that suggested recovery will be uneven.

Rupa Burman Roy | July 8, 2020 | Updated 17:30 IST
Sensex, Nifty snap five-day rally as rising virus cases hit recovery hopes
In terms of sectors, gains in metal, pharma, PSU Bank and FMCG were capped by losses in media, auto, realty and IT scrips

Sensex and Nifty reversed gains in a volatile trading session on Wednesday on back of weak global equities. Reversing trend from five consecutive sessions of gains, Sensex ended 345 points lower at 36,329 and Nifty closed 93 points lower at 10,705. Yesterday, Sensex ended 187 points higher at 36,674 and Nifty gained 36 points to 10,799.

Bajaj Finance, Bajaj Auto, Asian Paints, HCL Tech and Zee Entertainment were among the top losers today on NSE, while IndusInd Bank, SBI, JSW Steel, Tata Steel and Vedanta were among the top performers.

In terms of sectors, gains in metal, pharma, PSU Bank and FMCG were capped by losses in media, auto, realty and IT scrips.

Expressing views over near term market, Ajit Mishra, VP - Research, Religare Broking, "We may see a marginal dip in the index before the further up move and that would be a healthy correction. Firm global markets and recent buoyancy in the banking index would cap the downside."

Earlier, market indices opened with an uptick despite weak global cues but failed to hold gains and fell in the last hour of trade amid sharp profit-taking.

Overseas, most Asian counterparts, barring Kospi and Nikkei bounced back from lows and were trading back in positive territory. However, led by fall in Wall Street, European stocks continued bearish trend over gloomy economic forecast that suggested recovery will be uneven.

On today's trend, Vinod Nair, Head of Research at Geojit Financial Services said,"Benchmark indices continued their volatile moves and ended with losses. Losses were led by Auto and IT indices. European markets also opened lower. Markets were volatile as virus infections continued to mount and uncertainty increased regarding the economic recovery."

Meanwhile, investors will prepare a new strategy to move ahead for Q1 earnings season, with Tata Consultancy Services (TCS) announcing its financial numbers for June quarter.  Besides this, official data on industrial production, and retail, as well as wholesale inflation, will be released this week. Movement of monsoon winds and its progress on the domestic grounds would also be closely watched in upcoming trades.

On Nifty's technical indicators, Ruchit Jain (Senior Analyst - Technical and Derivatives, Angel Broking said," As highlighted in our earlier report, post the recent sharp run-up, Nifty has now approached the resistance zone of 10800-11000 which coincides with the '200 DMA'. The coming session would be crucial where 10630-10700 would be the support and if this gets breached, then we could see some extension of profit booking towards 10500. On the flipside, 10850-11000 continues to be the resistance zone."

On the currency front, Indian rupee, the local unit ended weaker against the dollar at 75.01 per dollar. Earlier the domestic unit settled at 74.93 per dollar on Tuesday.

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