Market Slides For Third Consecutive Day, Nifty Breaches 11,000 Support

Amid uncertainties over economic growth, Indian equity markets ended negative for the third consecutive session on Wednesday with NSE's Nifty breaching the crucial trendline support of 11,000 points. Nifty lost almost 100 points and closed at 10,918 whereas BSE’s Sensex lost 267 points and closed at 37,060 points. The biggest losers on Wednesday were Tata Motors, Yes Bank, Tata Steel, ONGC and IndusInd Bank.

Mustafa Nadeem, CEO, Epic Research, said that the decline was due to negative global cues. "Though domestic cues had rumors of cut in corporate tax to 25 per cent and scrapping of surcharge on tax payments, but the sentiments were largely bearish. Derivatives data suggested there was heavy writing seen at 11,100 - 11,000 while Nifty also breached important trendline support forming from recent lows of 10800.  Nifty is also taking resistance from its 20 days moving average which is placed at 11,065," he said.

Nadeem added that for Nifty to reverse, it is important to breach 20 days moving average and sustain above it since it is a very important short term moving average for trend identification. 

"Nifty is already poised with negative sentiments as the latest quarterly numbers were not that good with most Nifty 50 companies missing the estimates. The rate cuts have not been able to rejoice as well since the market is concerned about a slowdown that is shadowing over global markets. We maintain our bearish view with lower targets of 10,800 - 10,750," he said. 

Among sectors, metal was the worst performer sliding by 2.92% per cent followed by industrials, which fell by 2.24 per cent. Capital goods fell by 2.17 per cent, and oil and gas by 1.9 per cent. Information Technology was the only sector closing in green, rising 0.16 per cent.

Vinod Nair, head of research, Geojit Financial Services, said an extended slowdown in the domestic economy had increased the volume of stressed assets in segments like industrial, infrastructure and financials while weak international prices in segments like metals, oil and gas and exports were increasing the volatility of the market.