Falling for the fourth straight day, benchmark Sensex declined by nearly 425 points on Friday due to selling in auto, pharma and banking shares and relentless foreign fund outflows.
The 30-share BSE benchmark Sensex dropped 424.90 points or 0.56 per cent to settle at 75,311.06. During the day, it tanked 623.55 points or 0.82 per cent to 75,112.41.
The NSE Nifty declined 117.25 points or 0.51 per cent to 22,795.90.
In four trading days, the BSE barometer tumbled 685.8 points or 0.90 per cent while the Nifty declined 163.6 points or 0.71 per cent.
On the benchmark front, a decisive break below 22,700 in Nifty could trigger the next leg of the downtrend, potentially dragging the index to 22,500 and then 22,000. On the upside, a recovery would first face resistance at 23,150 (20-DEMA), and a breakout above this level could extend gains towards the next major hurdle at 23,600 (200-DEMA).
“We reiterate our view to focus on banking and IT, as these sectors have shown relatively higher strength during the correction and will be key in determining the market’s next directional move,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.
Among other sectors, metals and energy indicate further recovery potential, while pharma remains vulnerable to more downside. In the broader market, traders should not read too much into the recent rebound and should use any further recovery to reduce positions while waiting for clear signs of trend reversal.
