Nifty IT Drags Market Down. Nifty Closes Below 16,500 - Post Market Analysis

NIFTY opened the day flat at 16,662 and broke yesterday’s low in the first 5-min candle itself. The fall continued till 16,500 and took support there. But the support was broken towards the end and NIFTY closed the day at 16,483, down by 147 points or 0.88%. 

BANK NIFTY started the day at 36,688 and fell 1% in one and a half hours. After the recovery, the index could trade well above 36,550 and hit the day low again. Bank Nifty ended the day at 36,408, down by 317 points or 0.87%.

All the indices except Nifty Media (+0.86%) closed in the red today. Nifty Bank (-0.87%), Nifty Auto (-1.1%), Nifty FMCG (-1.3%), Nifty Pharma (-1.1%) and Nifty Realty (-1%) fell more than 1%. Nifty IT (-2.8%) fell the most.

Major Asian markets closed mixed. European markets are also trading mixed currently.

Today’s Moves

Bajaj Finserv (+5.5%) closed as the Nifty 50 Top Gainer on expectations of considering a stock split this week. 

JSW Steel (+2%) closed near the major resistance near Rs 600 level. 

Cement-related stocks- Grasim (+1%), JK Cements (+2.9%), and Ramco Cements (+2.9%) moved up while other majors closed in the red.

Last week Infy (-3.4%) tested 1530 level resistance and the fall is continuing. Muted results also contributed to the fall.

All the IT stocks closed in the red, led by HCL Tech (-1.8%), Infy (-3.4%), LTTS (-5.4%), LTI (-4.1%), MindTree (-4.5%), Mphasis (-6.2%), TCS (-1.54%) and Wipro (-2.3%).

Strong profit-booking kicked into Hindustan Unilever (-2.9%) after the recent rally.

Axis Bank (-2.8%) closed in the red despite healthy Q1 results.

Bajaj Auto (-2.3%) reported a better than estimated Q1 standalone net profit at Rs 1170 crore.

Asian Paints (+0.11%) posted a Q1 consolidated net profit of Rs 1020 crore against the estimate of Rs 875 crore.

Vedanta (-6.4%) ended in the red, accounting for the ex-dividend date today.

Tanla closed in the 20% Lower Circuit as the net profit fell 29% to Rs 100 crore in Q1.

Markets Ahead

Weakness in global markets started a few days back. But Nifty has been fighting till today.

FIIs were also on the net buying side. But they turned into net sellers, and this is forcing traders to book profits. 

The current view is 'market is not weak, it has lost bullish momentum'. Since Nifty closed below 16,500, the next support on the watchlist is 16,400.

Bank Nifty has been taking the market up for more than a month. Will be watching 36,000 and 35,800 on the downside.

The fall from the 28,500 resistance level is very strong in Nifty IT, and it has brought a lot of weakness.

Reliance is still trading in the 2360-2420 region. Let's see how things work out there in the coming days.

We all love Reliance, but no strong buying is seen in the stock. Are you a Reliance investor? Share your views in the comments section of the marketfeed app.