After hitting fresh record highs in the first half of the August 18 session, the benchmark indices saw profit booking in the later part of the day amid selling in banking and metal stocks.
At close, the Sensex was down 162.78 points, or 0.29 percent, at 55,629.49, and the Nifty was down 45.80 points, or 0.28 percent, at 16,568.80. The market will remain shut on August 19 on account of Muharram.
In the opening hour, the Sensex and the Nifty touched record highs levels of 56,118.57 and 16,701.85.
“The index opened the day with a strong gap but profit booking from higher-end led index closed in negative territory at 16,569 with loss of nearly half percent and formed a bearish candle after forming bullish candles for four consecutive sessions,” said Rohit Singre, Senior Technical Analyst at LKP Securities.
The Nifty formed a dark cloud cover pattern on the daily chart, which is a bearish reversal candle formation, he said. The index still has good support at 16,500, if broken, more profit booking is likely and the index may slip to 16,400. Resistance now comes near 16,630-16,700 zone, Singre added.
Hindalco Industries, Kotak Mahindra Bank, ICICI Bank, Tata Motors and SBI Life Insurance were the top Nifty gainers. Eicher Motors, UltraTech Cement, Bajaj Finance, Adani Ports and Bajaj Finserv were among the top losers.
On the broader indices front, the BSE midcap index rose 0.26 percent and smallcap was down 0.18 percent.
Among sectors, the Nifty metal and bank indices fell 0.8 percent each, while buying was seen in FMCG, pharma and PSU bank names.
Stocks & sectors
On the BSE, the metal and Bankex fell a percent each, while the realty index dropped 0.67 percent.
Among individual stocks, a volume spike of more than 1,000 percent was seen in Indiabulls Housing Finance, RBL Bank and United Spirits.
A long buildup was seen in The Ramco Cements, United Spirits and UBL, while a short buildup was seen in NMDC, ICICI Bank and IndusInd Bank.
More than 200 stocks, including TCS, Wipro and Titan Company, hit a 52-week high on the BSE.
Technical View
The Nifty formed a bearish belt hold candle on the daily scale.
“It has to continue to hold above 16,500 zones to extend the momentum towards 16,700-16,750 zones, while on the downside, support shifts higher to 16,400 and 16,300 levels,” said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
Outlook for August 20
Ashis Biswas, Head, Technical Research, CapitalVia Global Research
The market saw some correction from higher levels of 16,700. For the short-term, it is crucial that the Nifty sustains above 16,500.
Early signs of reversal in the market with deviation occurring in Nifty 50, Nifty midcap, and Nifty smallcap. Traders should refrain from building a new buying position until further improvement in the market breadth.
Rahul Sharma, Co-Founder, Equity99
For August 20, the Nifty will have immediate support at 16,500 followed by 16,450-16,375. On the upside, 16,700 will act as resistance.
The Nifty Bank, which underperformed the Nifty, lost more than 400 points to closed at 35,554.50. It has immediate support at 35,300 and if it slips, then 35,000-34,850 will be the next support.
On the upside, 35,800 will be the hurdle above which 36,000-36,200 will act as a resistance level.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
The index faced some selling pressure and gave up its gains. However, the trend continues to remain positive and traders should use corrections to accumulate long positions.
The Nifty has good support at 16,400 and the momentum will continue to be strong and bullish until the index closes below this level.
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