Sensex, Nifty snap five-day gaining streak; analysts expect recovery in short term

Stock market outlook: The equity market snapped its five-day gaining streak after IT stocks crashed on Accenture's weak guidance. Accenture now expects annual revenue growth of 3% to 4% in constant currency terms, compared with its earlier forecast of 3% to 5%.

IT stocks led the losers on Sensex and Nifty today. BSE IT index tanked 992 pts to 26,829 and Nifty IT index crashed 1039 pts to close at 27,426. 

Nifty traded lower for most of the session. The index managed to hold the psychological 24,000 mark today despite the IT sector correction. The 50 stock index closed at 24,013, down 0.64% or 154.90 pts.

Sensex too crashed 607 pts to close at 76,802. 

Infosys (6.69%), Tech Mahindra (2.47%), TCS (3.53%), HCL Tech (2.74%) and HDFC Bank were among the top Sensex losers in the current session.

However, Nifty midcap index rose 138 pts to 62,517 and Nifty small cap stock index gained 79 pts to 18,784 level. As many as 162 stocks hit their 52-week highs today. On the other hand, 46 shares fell to their 52-week lows on BSE. 

Out of 4,415 shares traded, 2224 stocks ended in the green on BSE. Around 2002 stocks were in the red and 189 stocks remained unchanged.

Around 10 stocks hit their lower circuits. On the other hand, 10 shares hit their upper circuit limits on BSE.

Aakash Shah, Research Analyst, Choice Equity Broking Private Limited said, "Sensex has slipped below immediate short-term momentum levels after failing to sustain higher levels. Immediate resistance is placed near 77,200, followed by 77,300, while the 76,300–76,400 zone is expected to act as strong support and may attract accumulation from positional investors. A decisive move above resistance could revive buying interest, whereas a breach of support may extend the corrective phase."

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities said, "A small green candle was formed on the daily chart with minor lower shadow. Technically, this market action indicates minor downward correction from the highs. The crucial overhead resistance of 24150 (previous opening downside gap of 11th May and swing high of 26th May) weighed high and resulted into dip. The present weakness in Nifty is unlikely to damage the near-term uptrend status of the market. Nifty is expected to bounce from the lows and could surpass the hurdle of 24150 levels again in the short term. Immediate support is placed at 23800."

Previous session

The stock market extended its winning streak for the fifth consecutive session on Thursday .Sensex too gained 254 pts to close at 77,409. Nifty closed at 24,168 , up 0.34% or 82.30 pts.