The NSE Nifty 50 and BSE Sensex settled in losses on Monday as risk-off sentiment drove money out of the domestic markets on fears of potential trade wars in the wake of tariff impositions by the US. Larsen & Toubro Ltd. and Reliance Industries Ltd. share prices dragged the benchmark Nifty 50 the most.
The Nifty 50 ended 121.10 points or 0.52%, down at 23,361.05, and the Sensex ended 319.22 points or 0.41%, down at 77,186.74.
During the day, the Nifty 50 fell 1.11% to 23,222.00, the Sensex fell 0.97% to day's low of 76,756.09.
The US imposed tariffs on Canada, Mexico, and China on Feb 1. China has already vowed to challenge the tariffs at the World Trade Organisation. This has created a fear of potential trade wars.
"Technically, in the backdrop of weak global sentiment, our market opened with a gap down but found support near the 20-day SMA (Simple Moving Average) and reversed. We believe that the current market texture is volatile and non-directional; hence, level-based trading would be the ideal strategy," said Shrikant Chouhan, head of equity research at Kotak Securities.
For day traders, the 20-day simple-moving average, along with support levels of 23,270/77,000 and 23,220/76,800, would act as key support zones, while resistance areas for the bulls are around 23,500/77,500 and 23,550/77,800. However, if the market dips below 23,220/76,800, it may retest the levels of 23,100/76,500, Chouhan added.
Bajaj Finance Ltd., Mahindra & Mahindra Ltd., Bharti Airtel Ltd., Infosys Ltd., and Maruti Suzuki India Ltd. were added to the Nifty 50 index.
Larsen & Toubro Ltd., Reliance Industries Ltd., HDFC Bank Ltd., and ITC Ltd. weighed on the index.
On NSE, nine sectors declined, and three advanced out of 12. The NSE Nifty Energy declined the most, and the NSE Nifty IT rose the most.
The BSE Midcap and Smallcap indices ended 0.89% and 1.77% down, respectively.
On BSE, 16 sectors declined, and five advanced out of 21. The BSE Capital Goods declined the most, and the BSE Consumer Durables rose the most.
Market breadth was skewed in favour of sellers. Around 2,870 stocks declined, 1,142 stocks advanced, and 172 stocks remained unchanged on BSE.
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