Look for global cues

The trade war jitters led to across-the-board selling as the Sensex and Nifty saw a gradual slide right from the opening of the trading session. The  Sensex fell 261.52 points, or 0.74 per cent, to settle at 35,286.74. The Nifty 50 fell 89.40 points, or 0.83 per cent, to settle at 10,710.45. Selling in the Mid-Cap and Small-Cap indices was even sharper with the BSE Mid-Cap Index down 0.98 per cent and BSE Small-cap Index down 1.29 per cent. The market breadth was weak with 1,951 stocks declining as against 676 stocks gaining on the BSE.

Technical view

Mustafa Nadeem, CEO, Epic Research, said: “It has been a second consecutive day for the market to lose some marginal gains though it is important to see that Nifty is still above 10,700. Broader indices may consolidate. The divergence is already there with Nifty resurging to 10,800 marks while Small-Cap and Mid-Cap continue to trade lower, indicating the breadth is exhausted in that space. The heavyweight sector, Financials, is already seen as a laggard since the previous week. We are seeing a stiff range bound trading in the Nifty Bank between 26,100 and 26,600.

“Investors are jittery over continuous outflow from FPIs and FIIs. On the other side, we have seen higher participation from DII in the last couple of months and has been buying the dip in the last couple of months. The US-China trader war is now also spread to EU and India and it may see more agitated decisions from economies in coming time. The continuous rise in dollar index is impacting the market sentiments and with that, we may see a further outflow of capital. Nifty is well supported at 10,650-10,640 zone while Bank Nifty has strong support at 26K mark.

Market view

Jayant Manglik, president, Religare Broking, said: "All the sector indices ended in red with metal, realty and oil & gas being the top losers. The on-going trade war escalation between US-China has definitely dampened investor sentiments. However, softening of crude oil prices works in favour of Indian market. Remain cautious on the Indian markets. With lack of any fresh triggers on the domestic front, apart from monsoon progress, the Indian markets would look to global cues."

—Ravi Ranjan Prasad