Bulls vs Bears: Here's what to expect on Dalal Street today

The Indian market ended lower for the third straight session this week in a highly volatile session on May 25. Sensex extended its decline for the third straight day, falling over 300 points amid a sell-off in IT stocks. Sensex tanked 303.35 points or 0.56 per cent to end at 53,749.26. Nifty declined 99.35 points or 0.62 per cent to close at 16,025.80.

Asian Paints, TCS, Wipro, Tech Mahindra, Larsen & Toubro, Infosys, State Bank of India, HCL Technologies and M&M were among the top Sensex losers, falling up to 8.04 per cent. NTPC, Bharti Airtel, HDFC, Kotak Mahindra Bank, Nestle, ICICI Bank and ITC were the top gainers, rising up to 3.84 per cent. BSE mid-cap and small-cap indices lost 430 points and 760 points, respectively.

Among BSE sectoral indices, IT, and capital goods shares were the top losers, with their indices falling 925 points and 644 points, respectively.

The market breadth was negative with 717 shares ending higher against 2,611 stocks falling into the red, while 116 shares were unchanged.

Here's a look at what experts said about the outlook of the market in today's session.

Osho Krishan, Sr. Analyst - Technical & Derivative Research, Angel One said, "The index is currently placed at the critical support zone of the 16000 mark, and any breach below the same could dampen the sentiments once again. As far as levels are concerned, the 15700-15750 zone is expected to cushion the downside of any near-term breakdown. While on the contrary, 16200-16250 is the immediate resistance for the index, followed by the 16400 level in the near term."

"The banking and financial space has single-handedly provided a sentimental boost among the market participants. In contrast, tracking the global sell-off, IT lost its sheen and dragged the market lower. Traders are advised to keep a close tab on the global developments. Also, we advocate avoiding any aggressive bets and being selective in stock picking for trading opportunities," Krishan added.

Subash Gangadharan, Senior Technical and Derivative Analyst, HDFC Securities said, "Daily time frame of Nifty indicates that index has made a double bottom around the 15735 levels and rallied sharply last Friday. Nifty has however failed to convincingly cross the recent swing high of 16,400 and is showing tiredness and has corrected in the last three sessions. Many stocks are also correcting and failing to hold on to their recent gains. Combined with the negative market breadth, this is a sign of weakness and caution is therefore warranted. Traders should wait for strength to emerge before going aggressively long. While we remain open to further pullback rallies in the very near term, we must remember that the intermediate trend remains down. The bears would gain more control once the recent intermediate low of 15,735 is broken."

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities said, “The subdued mood in the market continued for the third straight session as investors preferred to liquidate their holdings in stocks which are still highly valued. Investors are also waiting for the US FOMC minutes that will provide some clarity on where the market could move in the near-term. Technically, on intraday charts, from the last three days the Nifty is holding lower top formation. And on daily charts, it has formed a bearish candle which is broadly negative. We are of the view that the short-term market structure is weak but it is in an oversold territory. For traders, now 16,000 would act as a sacrosanct level. If the index succeeds to trade above the same, then it could move up to 16150-16260. However, below 16000 the selling pressure is likely to increase. Below the same, the chances of hitting 15900-15850/53300 would turn bright.”

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