So, how should one trade the markets now? Amar Ambani, Head of Research at IIFL, feels selling pressure on the Nifty could intensify going forward. “Selling pressures accentuated on Monday after the Nifty failed to sustain above the 6,120 mark. Moreover, Nifty breached the neckline of a head and shoulder pattern in intra-day trades which indicates that selling could intensify further.” He sees 5860 as near-term support for the Nifty, which is its 100 daily moving average.
It was a weak start to the week for Indian equities. On Monday, benchmark indices extended their losing streak for the second consecutive session amid fresh selling in oil and gas, power and capital goods. Even midcap stocks were under pressure in trade today.
Auto sales data for May jolted sentiment on disappointing numbers. Sales at market leader Maruti Suzuki India declined 13% year-on-year to 77,821 units while Tata Motors’ passenger vehicle sales slipped 44.6% YoY.
On the other hand, IT, realty and metal counters were the only saving grace in today’s session.
The rupee continued to haunt traders by hovering around its 11-month low.
To add to the overcast skies in Mumbai, the May HSBC Manufacturing Purchasing Managers’ Index sank to a 50-month low of 50.1 from 51 in April. This was its third straight monthly fall.
The Sensex ended Monday at 19,610, down 150 points, while Nifty closed at 5,939, down 47 points over Friday’s close