“After a sharp rebound of around 700 points towards 25,300 levels, a retracement move was anticipated and there was selling pressure on weekly expiry for NSE contracts,” said Nilesh Jain, head, Derivatives and Technical Research, Centrum Broking. “However, the setup remains positive.”
Jain said global markets are also not supportive, and the euphoric rally in precious metals has led to some diversion of funds from equities to gold, riding on investors’ fear of missing out.
Gold prices hit a new all-time high on Tuesday as the prices gained 1.6% to ₹1,29,430 per 10 grams.
“Investors can continue to hold precious metals, but the risk reward is unfavourable for fresh purchases,” he said. All sectoral indices ended lower on Tuesday. The Nifty PSU Bank index dropped 1.5%, while the consumer durables and media indices slid over 1% each.
“Banking stocks lost some ground on Tuesday due to profit taking at higher levels, but further declines can be used as a buying opportunity,” said Gaurav Sharma, head of research, Globe Capital. Jain said Nifty is expected to surpass 25,500 levels, while Bank Nifty is likely to outperform and move beyond 57,500 levels in October.
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The Nifty Mid-cap 150 and the Small-cap 250 indices declined 0.7% and 0.9%, respectively, on Tuesday. Out of the 4,334 shares traded on BSE, 1,286 advanced, while 2,935 declined.
In the past week, the mid-cap and small-cap indices shed 0.2% and 0.8%, respectively. Foreign portfolio investors (FPIs) sold shares worth a net ₹1,508.5 crore on Tuesday. Their domestic counterparts bought shares worth ₹3,661.1 crore. In October, global investors offloaded shares worth ₹1,100.5 crore.
“The buying interest is expected to continue in the banking and financial pack, especially in the PSU Banks and select private banks,” said Sharma.
“Automobiles sector also looks promising at the advent of the festive season post the rationalisation of GST.”
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