Sensex, Nifty end over 2% lower on budget woes, global sell-off

Closing bell

After plunging over 907 points during the day, the 30-share BSE index Sensex ended 792.82 points or 2.01 per cent lower at 38,720.57, while the Nifty closed below the 11,600 mark at 11,558.60, down 252.55 points or 2.14 per cent.

Domestic equity benchmark BSE Sensex plummeted 793 points Monday to extend losses for a second straight session, dragged by losses in index major HDFC Bank, L&T and Bajaj Finance, amid Union Budget overhang and heavy selloff in global equities.

The indices were dragged down by the finance and auto stocks.

In the Sensex pack, the major losers were Bajaj Finance, ONGC, Hero MotoCorp, Maruti and NTPC. Yes Bank, HCL Tech and TCS, however, bucked the downtrend by rising up to 5.56 per cent.

Sectorally, Capital goods, realty, power and industrials ended lower by over 3 per cent.

In the broader index, the top losers were Bajaj Finserv, Bajaj Finance, ONGC, IBUL Housing Finance and Hero MotoCorp while the gainers were Yes Bank, HCL Technologies, JSW Steel, Infratel and TCS.

According to traders, the Union Budget proposal to raise public shareholding threshold and higher tax incidence for foreign portfolio investors and high networth individuals continued to spook domestic investors. Besides overhang from the Union Budget, domestic equities extended losses tracking a major selloff in global equities, traders said.

Other Asian markets ended significantly lower as hopes of steep cuts in interest rates by the US Federal Reserve were crushed after the world’s largest economy posted better-than-expected jobs data Friday.

Shanghai Composite Index ended 2.58 per cent lower, Hang Seng plunged 1.54 per cent, Nikkei 0.98 per cent and Kospi tumbled 2.20 per cent. Equities in Europe were also trading lower in their respective early sessions.

On the currency front, the Indian rupee depreciated 30 paise to 68.72 against the US dollar. Meanwhile, the global oil benchmark Brent crude futures were trading 0.12 per cent higher at 64.31 per barrel.

Yes Bank stocks in green

Yes Bank hired hires two veteran bankers as senior group presidents. File Photo

Shares in Yes Bank rise as much as 7.3 per cent to ₹94.60 amid a broader sell-off in Indian shares. The stock set to snap 4-day losing streak after hitting a 5-year low earlier in the day. The bank hires two veteran bankers as senior group presidents - Rajeev Uberoi will lead governance and controls, while Anurag Adlakha will lead financial management and strategy. Read more on the YES Bank share price and appointment here

Auto stocks hammered

Automaker Maruti Suzuki India Ltd tumbles 5.89 per cent, its lowest since March 31, 2017. About 1.5 million Maruti shares changed hands compared with the 30-day average of around 748,800 shares. The auto index is down as much as 3.51 per cent, its lowest in over three years.

European shares

The pan-European STOXX 600 index was up 0.1 per cent. File Photo

European shares reversed course from early losses to trade marginally higher, boosted by German lender Deutsche Bank's major overhaul and on positive developments in the US-China trade talks.

The pan-European STOXX 600 index was up 0.1 per cent by 0823 GMT, with moves in the region's major country indices being muted as hopes of a 50 basis point interest-rate cut this month by the US Federal Reserve were tempered by strong US jobs data on Friday. Read the European stock markets report here

Sensex nosedives 900 points

Domestic equity benchmark BSE Sensex plummeted over 900 points in late afternoon trade dragged by losses in index heavyweights HDFC Bank, L&T and Bajaj Finance, amid heavy selloff in global equities.

After plunging 907 points, the 30-share index was trading 865.36 points, or 2.19 per cent, lower at 38,648.03. Similarly, the broader Nifty sank 275.40 points, or 2.30 per cent, to 11,539.75.

Top losers in the Sensex pack included Bajaj Finance, ONGC, Hero MotoCorp, Maruti, L&T, NTPC, SBI, Tata Motors and Axis Bank, cracking up to 9 per cent. While, Yes Bank, HCL Tech, TCS, TechM, M&M and Infosys were among the gainers, rising up to 5 per cent.

In the previous session, the 30-share gauge finished 394.67 points, or 0.99 per cent, lower at 39,513.39, and the Nifty sank 135.60 points or 1.14 per cent, to 11,811.15, after the Union Budget proposal to raise public shareholding threshold fanned fears of oversupply of new papers in an already overbought market.

According to traders, higher tax incidence proposed in the Budget for foreign portfolio investors and high net worth individuals is also weighing on investor sentiment here.

On a net basis, foreign institutional investors sold equities worth Rs 89.38 crore, while domestic institutional investors purchased shares to the tune of Rs 275.63 crore, provisional data available with stock exchanges showed Friday.

Besides overhang from the Union Budget, domestic equities extended losses tracking a major selloff in global equities, traders said.

Other Asian markets opened significantly lower as hopes of steep cuts in interest rates by the US Federal Reserve faded after the world’s largest economy posted better-than-expected jobs data Friday.

Shanghai Composite Index plunged 2.58 per cent, Hang Seng 1.54 per cent, Nikkei 0.98 per cent and Kospi tumbled 2.20 per cent.

On the currency front, the Indian rupee depreciated 30 paise to 68.72 against the US dollar. Meanwhile, the global oil benchmark Brent crude futures were trading 0.56 per cent higher at 64.58 per barrel. - PTI

Hike in gold import duty in line with policy

The  decision to raise customs duty on gold  is a part of the government’s stated policy to curb imports of non-essential items, and enforcement agencies will deal with the problem of smuggling. Revenue Secretary Ajay Bhushan Pandey said economic decisions are based on the overall economic realities and not on the basis of whether somebody intends to misuse it.

The gems and jewellery industry has expressed disappointment with the Union Budget 2019-20, saying the increase in customs duty will negatively impact the sector, encourage the grey market and make jewellery more expensive in the domestic market. Read more on what Revenue Secretary says on hike in gold import by the government in the Union Budget announcement

Nifty Call

Taking bearish cues from the Asian markets, the Sensex and the Nifty began the session with a gap-down open and continued to trend downwards. The market breadth of the Nifty index is biased towards declines. The Nifty July month contract started the session with a gap-down open at 11,769 and extended the down-move. The contract breached a key support at 11,700. Read our Nifty Call for July futures here

Sensex, Nifty fall

The 30-share BSE index Sensex dropped 845.90 points or 2.14 per cent to 38,667.49 dragged by bank and auto stocks.

The major losers were Bajaj Finance, ONGC, Hero MotoCorp, Maruti and L&T while the gainers lending support to the index were Yes Bank, HCL Technologies, TCS and Tech Mahindra.

Among the sectoral indices, finance, auto, industrials, power and realty fell over 3 per cent.

Meanwhile, the Nifty slumps 250.95 points or 2.14 per cent to 11,558.75. The major stocks leading the negative pack were Bajaj Finserv, Bajaj Finance, ONGC, IBUL Housing Finance and Hero Motocorp while the gainers were Yes Bank, HCL Technologies, JSW Steel, Infratel, and TCS.

Stock analysis: Cadila Healthcare

Cadila Healthcare appears to be in for some rocky times owing to a recent regulatory clampdown and increased competition for its high-margin products in the US market. In April, the US drug regulator USFDA inspected Cadila’s key formulations plant at Moraiya, Ahmedabad.

Reacting to this, the shares of Cadila hit a 52-week low over the following weeks. If the 483 observations issued to the Moraiya facility get escalated to a warning letter or an import alert, the stock can slip further. With the prospects of the company’s FY20 earnings looking bleak, investors can book profit and wait for better revenue and earnings visibility before considering the stock. Read the stock analysis of Cadila Healthcare here

Bullion cues

It was another volatile week for gold. Global spot gold prices surged 2 per cent intra-week to reach a high of $1,437 per ounce. The strong job numbers dashed the hopes for a rate cut from the US Federal Reserve this month. As a result, gold, which had surged above the psychological mark of $1,400, witnessed a sharp fall on profit booking.

On the domestic front, the gold and silver futures contract on the Multi Commodity Exchange (MCX) spiked on Friday following the announcement of an increase in import duty. The MCX-Gold and MCX-Silver futures contract spiked over 2 per cent each intraday following this announcement on Friday to make a high of ₹35,100 per 10 gm and ₹38,075 per kg, respectively. Read more the bullion market and Union Budget's impact on the metal prices here

Sensex, Nifty slump

The 30-share BSE index Sensex slumped 646.33 points or 1.64 per cent to 38,866.76. Bank, consumer durables and auto stocks dragged the index lower.

The major losers leading the pack were Bajaj Finance, Maruti, ONGC, Hero MotoCorp, and L&T while the stocks of Yes Bank, HCL Technologies, and TCS were trading green.

The broader index Nifty too dropped to 11,608.40 points, lower by 202.75 points or 1.72 per cent. Top laggards were Hero MotoCorp, L&T, ONGC, IOC and Grasim while the gainers were Yes Bank, HCL Technologies, JSW Steel, Infratel and Infosys.

Maruti cuts production

Auto manufacturers have been facing muted sales for quite some time now

The country’s largest car maker Maruti Suzuki India (MSI) has cut vehicle production for the fifth consecutive month in June, according to a regulatory filing. The auto major said it slashed total vehicle production, including Super Carry LCV, by 15.6 per cent last month to 1,11,917 units as compared to 1,32,616 units in the year-ago month.

Auto manufacturers have been facing muted sales for quite some time now. The slowdown has forced companies to adjust their production schedules to market demand. Click here to read more on the production cut and sales of Maruti Suzuki

The stocks of Maruti Suzuki were trading 5.15 per cent lower at Rs 6,037.

Mindtree sees worst session

An outside view of Mindtree campus. File Photo

Shares of IT services firm Mindtree Ltd were down as much as 6.8 per cent, marking their biggest intraday per cent loss since October 2018. The stocks of Mindtree were trading 10.61 per cent lower at Rs 722.35

The company’s top management on Friday, including CEO Rostow Ravanan, have submitted their resignations to the board, days after conglomerate Larsen & Toubro Ltd (L&T) took a controlling stake.

Sensex drops 638 points

The 30-share BSE index Sensex slipped 638.17 points or 1.62 per cent to 38,882.61dragged by financials and auto stocks.

The top stocks leading the negative pack were Bajaj Finance, Maruti, ONGC, Hero MotoCorp and SBI while the scrips lending gaining in the pack were Yes Bank, HCL Technologies and TCS.

Sectorally, realty and capital good stocks fall 3.22 per cent, followed by auto stocks trading lower by 2.83 per cent.

Similarly, the broader index Nifty dropped 201.05 points or 1.70 per cent to 11,610.10. The top losers were Hero MotoCorp, L&T, ONGC, IOC and Grasim while the gainers were Yes Bank, HCL Technologies, JSW Steel, Infratel and Infosys.

L&T Midcap

With valuations of mid-cap stocks correcting, long-term investors can consider taking exposure to mid-cap funds. L&T Midcap boasts a solid track record in this category.

The fund has delivered good returns across market cycles and has outperformed its benchmark — the Nifty Midcap 100 TRI — over longer periods of three and five years. Investors can consider the SIP route to take advantage of volatility in the market. Read more on the performance of L&T Midcap mutual fund here

Hero MotoCorp emerges top loser

File photo of manufacturing facility of Hero MotoCorp.

Shares of Hero MotoCorp Ltd fall as much as 5.62 per cent to ₹2,371, their lowest since September 30, 2015. The stock breaks below a support at ₹2,487.64, the 61.8 per cent Fibonacci projection level of the downtrend from September 1, 2017 high to October 25, 2018 low.

The stock is down 19.1 per cent this year as of last close, while the broader NSE Index is up 8.7 per cent in the same period. Currently, the stocks of Hero MotoCorp is trading 4.36 per cent lower at Rs 2,404.05. More on the stock activity of Hero MotoCorp, read here

Financials, auto stocks drag Sensex lower

The 30-share BSE index Sensex slumped to 38,934.56, lower by 578.83 points or 1.45 per cent dragged by auto and financial stocks.

The top losers leading the negative pack were Bajaj Finance, ONGC, Hero MotoCorp, SBI and L&T while the stocks cushioning the index were Yes Bank, HCL Technologies, TCS and Reliance.

All the sectors were in the negative zone. The stock indices of capital goods, Industrials, Realty and auto were the major losers.

The 50-share NSE index was trading at 11,633.95, lower by 177.20 points or 1.50 per cent. The major losers were Hero MotoCorp, L&T, ONGC, IOC and Grasim while the stocks of Yes Bank, HCL Technologies, JSW Steel, Infratel and Infosys were leading the positive zone.

Gold and precious metals

Spot gold may retest resistance at $1,439/oz.

Gold prices inched lower following a steep fall in the previous session, as robust US jobs report dashed hopes of an aggressive interest rate cut by the Federal Reserve later this month. Spot gold was down 0.1 per cent at $1,398.75 per ounce.

The dollar took heart from strong US jobs data and rose to more than two-week high, making gold more expensive for holders of other currencies. Among other precious metals, silver rose 0.3 per cent to $15.02 per ounce, while palladium fell 0.1 per cent to $1,564.41. Click here to read more on the gold and precious metals prices

Yes Bank appoints two Senior Group Presidents

Private sector lender Yes Bank on Monday announced the appointment of Rajeev Uberoi as Senior Group President – Governance and Controls and Anurag Adlakha as Senior Group President and Head – Financial Management and Strategy.

Both are external hires and will report directly to Ravneet Gill, the bank’s Managing Director and CEO. The appointment comes at a time when Yes Bank’s shares have been on a downward spiral and are now trading at below ₹100 apiece levels. Click here to read more on the YES Bank appointments

The stocks of Yes Bank were trading at Rs 92.80, higher by 5.22 per cent

PNB shares sink

Shares of Punjab National Bank (PNB) plunge as much as 8.2 per cent to ₹75.10, their lowest since June 20. The state-owned lender said on Saturday it had detected a ₹3,800 crore ($554.1 mln) borrowing fraud in Bhushan Power & Steel Ltd's account.

PNB says Bhushan Power & Steel misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks, adding it has made provisions of ₹1,932 crore in Bhushan's account.

The stocks of Punjab National Bank was trading 10.76 per cent lower at Rs 72.95

Sensex tanks 580 points

The 30-share BSE index Sensex slumped 628.88 points or 1.59 per cent to 38,884.51 and the broader index Nifty too was trading lower at 11,632.20, down 1.52 per cent or 178.95 points.

The industry heavyweights, bank and auto stocks were the top losers dragging the indexes down.

The major losers were ONGC, Hero MotoCorp, Bajaj Finance, SBI and L&T while the toppers were Yes Bank, HCL Technologies, TCS and Tech Mahindra in the Sensex pack.

Among the sectoral indices, all the indexes were in the negative zone with capital goods leading the pack.

In the Nifty pack, the top gainers were Yes Bank, HCL Technologies, JSW Steel, Infrasteel and Infosys while the laggards were Hero MotoCorp, L&T, ONGC, IOC and Grasim

Commodities market

Crude prices rose

Crude prices rose, adding to gains in the previous session on better-than-expected US jobs data, although gains were tempered by worries over the prolonged Sino-US trade war.

Brent crude futures were up 10 cents, or 0.2 per cent, by 0048 GMT at $64.33. US West Texas Intermediate (WTI) was up 14 cents, or 0.2 per cent, at $57.65 a barrel. Both oil benchmarks fell last week as concerns about a slowing global economy outweighed risks to supply. Read the commodities market report here

Rupee market

The rupee on Monday depreciated by 16 paise.

The rupee depreciated by 16 paise to 68.58 against the US dollar in early trade, mainly due to heavy selling in domestic equities and foreign fund outflows. However, weakening of the American currency in the overseas market, and easing crude oil prices restricted the rupee’s decline, forex traders said.

The rupee came under pressure following heavy selling in domestic equities amid outflow of foreign funds, they added. Read the local currency market report here

Stock market battered

Stock markets fell, in line with broader Asia on strong US jobs data, while the government's move to tax share buybacks and increase minimum public shareholding in listed companies disappointed domestic investors.

On Friday, Finance Minister Nirmala Sitharaman proposed in the Union budget increasing the minimum public shareholding in listed companies to 35 per cent from 25 per cent, threatening a wave of new issuance.

The broader NSE index was down 132.05 points or  1.12 per cent at 11,679.10, while the benchmark BSE index was trading 407.56 or 1.03 per cent lower at 39,105.83. Of the 50 stocks on the NSE index, 43 were trading in the red.

Sentiment in broader Asia was negative too with MSCI's broadest index of Asia-Pacific shares outside Japan inching over 1 per cent lower after strong U.S. jobs data tempered expectations for a Fed rate cut.

In India, the auto index was trading over 2 per cent lower after the government in the budget lowered goods and services tax (GST) on electric vehicles to 5 per cent from 12 per cent and raised basic customs duty on auto parts.

Shares of Hero MotoCorp Ltd and Maruti Suzuki India Ltd were among the top losers on the NSE index. Maruti shares were down as much as 3.36 per cent, their lowest since April 2017, while Hero Moto shares hit their lowest level since September 2015.

“The markets are voicing their disappointment in the lack of anything in the budget for the consumer. A fair amount of the investor community is disappointed with the budget and there will likely be short-term money exiting the market,” said Sunil Sharma, chief investment officer, Sanctum Wealth Management.

The government also unexpectedly trimmed its fiscal deficit target to 3.3 per cent from 3.4 per cent for this year in a bid to revive a stagnating economy and said some of its borrowing would be made offshore.

Important indicators of economic activity, like the dipping index of industrial production and plummeting automobile sales have confirmed a slowdown in the country's economy. “The government is choosing fiscal conservatism, everything now falls on monetary policy and more rate cuts and that will eventually lead to a recovery probably by the end of the year,” Sharma added.

Shares of Punjab National Bank (PNB) fell as much as 8.19 per cent after the state-owned lender said it had flagged a borrowing fraud of 38.05 billion rupees ($554.83 million) in Bhushan Power & Steel Ltd's account to the country's central bank.

The country's IT index, which fell after Friday's budget announcement, was trading nearly 1 per cent lower. Shares of Tata Consultancy Services Ltd were down as much as 1.43 per cent- lowest in over 5-weeks. The IT services company is scheduled to post first quarter results on Tuesday. - Reuters

Forex market

The dollar rose broadly after strong US jobs growth in June suggested the Federal Reserve will not aggressively cut interest rates later this month. The dollar index climbed to as high as 97.443 on Friday, its highest level since June 19, as US Treasury yields rose across the board.

The index, which measures the greenback against a basket of major currencies, was last quoted at 97.277, almost flat in early Asian trade, with the euro traded at $1.1223. Read the forex market report here

Buyback tax will hit market volumes

A sharp squeeze in equity trading volumes will be one of the key consequences of a 20 per cent tax proposed to be imposed on buyback of listed company shares. Buyback of shares was one of the key methods used by companies to pass off surplus tax in their accounts to shareholders.

A counter where share buyback was either expected or announced saw a jump in trading volumes for several weeks, thereby generating crucial share market liquidity worth thousands of crores and giving a windfall on securities transaction tax (STT) to the government. Click here to read more on the buyback tax and its impact on the stock markets

Sensex tanks 400 points

Domestic equity benchmark BSE Sensex cracked over 400 points in early trade dragged by losses in HDFC twins, L&T and RIL stocks, amid heavy selloff in global equities. The 30-share index was trading 392.16 points, or 0.99 per cent, lower at 39,121.23. Similarly, the broader Nifty sank 124.35 points, or 1.05 per cent, to 11,686.80.

Top losers in the Sensex pack included Hero MotoCorp, L&T, Maruti, Bajaj Auto, M&M, Tata Motors and HUL, falling up to 3.44 per cent. While, Yes Bank, HCL Tech, Sun Pharma, Infosys, ITC, Vedanta and PowerGrid were among the gainers, rising up to 6 per cent.

In the previous session, the 30-share gauge finished 394.67 points, or 0.99 per cent, lower at 39,513.39, and the Nifty sank 135.60 points or 1.14 per cent, to 11,811.15, after the Union Budget proposal to raise public shareholding threshold fanned fears of oversupply of new papers in an already overbought market.

On a net basis, foreign institutional investors sold equities worth Rs 89.38 crore, while domestic institutional investors purchased shares to the tune of Rs 275.63 crore, provisional data available with stock exchanges showed Friday.

Besides overhang from the Union Budget, domestic equities extended losses tracking a major selloff in global equities, traders said.

Other Asian markets opened significantly lower as hopes of steep cuts in interest rates by the US Federal Reserve faded after the world’s largest economy posted better-than-expected jobs data Friday.

Shanghai Composite Index plunged 2.46 per cent, Hang Seng 1.64 per cent, Nikkei 0.99 per cent and Kospi tumbled 1.85 per cent in their respective early sessions.

On the currency front, the Indian rupee depreciated 15 paise to 68.57 against the US dollar. Meanwhile, the global oil benchmark Brent crude futures were trading 0.06 per cent higher at 64.27 per barrel.

Asian markets

People pass stock index tickers at the Singapore Exchange (SGX) premises (file photo)

Asian shares fell after strong US jobs data tempered expectations for a Fed rate cut, while the Turkish lira hovered near two-week lows on worries about central bank independence. Asian shares were broadly weaker, tracking Wall Street, which fell from record highs last week. MSCI's broadest index of Asia-Pacific shares outside Japan lost more than 1 per cent, with every market in the red. Read the Asian markets report here

Stocks in focus

The board of Swelect Energy Systems will meet on Monday to consider the unaudited financial results for the quarter ended June 30, 2019. Besides, the board agenda includes a bonus proposal. Shareholders of the company would be keen to know the entitlement ratio and record date. Earlier, the Chennai-based company had declared a 1:1 bonus in 2009. For FY18-19, Swelect Energy had reported a net profit of ₹11.05 crore on revenues of ₹119.84 crore.

Delta Corp , Goa Carbon and Steel Strips Wheels will declare their quarterly financial results for the period ended June 2019 on Monday. Aarti Industries and Superhouse will also consider results but for the year ended March 2019. Aarti’s results would be post the composite scheme of arrangement between Aarti Industries and Arti Surfactants and Nascent Chemical Industries. Respective shareholders and market players will monitor the performance.

Opening bell

The 30-share BSE index Sensex was opened 37.01 points lower at 39,476.38 against the previous close of 39,513.39. While the 50-share NSE index Nifty opened 85.5 points lower at 11,725.65 against the previous close of 11,811.15.

Weekly Trading Guide

Uptrend gains momentum in SBI (₹370.6)

The upmove in SBI is gaining momentum. The stock surged 2.7 per cent and closed in the green for the third consecutive week. The strong rally last week has pushed the stock above the crucial long-term resistance level of ₹362. The outlook is bullish, and it’s very likely the stock will rally to ₹395 and ₹400 in the coming weeks. A strong break above the intermediate resistance level of ₹373 will pave way for this rally. The region around ₹400 is a strong resistance, which can halt the current uptrend. On the other hand, if SBI fails to breach ₹373, a corrective fall to ₹362 is possible. In such a scenario, a sideways consolidation between ₹362 and ₹373 is possible for some time within the overall uptrend. However, the bias will remain positive for SBI during this sideways consolidation to break the range above ₹373. The level of ₹362 will act as a good support. A break below ₹362 looks less probable now. Dips to this support are likely to get fresh buyers coming into the market.

Near-term outlook is mixed for ITC (₹279.45)

ITC tumbled over 3 per cent intra-day on Friday but managed to claw-back recovering all the loss. The stock tumbled to a low of ₹268.1 on Friday and reversed sharply higher from there to close at ₹279.45, up 2 per cent for the week. The daily chart is showing early signs of a turnaround. But the medium-term chart suggests that the recent movement over the last one month could still be a consolidation within the downtrend. This leaves the near-term outlook mixed for ITC. The price action in the coming days will need a watch to get a clear cue on whether the downtrend is getting reversed or not. Key resistances are poised at ₹282 and ₹285. A strong rise past ₹285 is needed to ease the downside pressure. Such a break can take ITC higher to ₹300 and ₹305. On the other hand, if ITC fails to breach ₹285, it can initially test ₹277 — the 21-day moving average support. A further break below ₹277 will then increase the likelihood of the stock revisiting the crucial support level of ₹272

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Infosys poised for a crucial support (₹718.25)

Infosys fell about 2 per cent last week. The stock tumbled over 4 per cent over the last couple of weeks. The near-term outlook remains negative. However, crucial supports are on the cards, which can halt the current down-move. Support is in the ₹700-695 region. A bounce from this zone will keep the broader ₹695-775 sideways range intact. Infosys has been stuck in this range since mid-January this year. Such a bounce will ease the downside pressure and take the stock higher to ₹725-730 band. A further break above ₹730 will then increase the likelihood of the upmove extending to ₹750-760 levels. But if Infosys breaks below ₹695, it can test ₹685 — a crucial long-term trend-line support. A bounce from ₹685 can keep the stock in a narrow range between ₹685 and ₹700 or ₹720 for some time. But a strong break and a decisive close below ₹685 will signal a trend reversal. Such a break will increase the likelihood of the stock tumbling to ₹650 due to profit booking.

RIL is stuck in a sideways range (₹1,262.2)

RIL has been stuck in between its support at ₹1,245 and resistance at ₹1,315 over the last couple of weeks. The near-term outlook is mixed. A breakout on either side of ₹1,245 or ₹1,315 will determine the direction of the next move. If RIL manages to break the range above ₹1,315, it can move up to ₹1,350-1,360. Such a move will ease the downside pressure and bring back the possibility of the stock revisiting ₹1,400 levels. But if RIL breaks the range below ₹1,245, it can fall to ₹1,220. A further break below ₹1,220 will then increase the likelihood of the stock extending its down-move to ₹1,210 and ₹1,200. The region around ₹1,200 is a strong long-term support. A fall below ₹1,200 looks less probable now as fresh buyers are likely to emerge at lower levels. But a strong break below ₹1,200 will turn the outlook bearish and mark the end of the long-term uptrend that has been in place since 2017. In such a scenario, RIL will be in danger of tumbling to ₹1,150 and ₹1,100 levels.

Tata Steel retains its sideways range (₹478.15)

Tata Steel retains its ₹460-520 sideways range. Within this range, the stock tumbled over 5 per cent last week. The stock can dip further in the coming days to test ₹460 — the lower end of the range. A bounce from there will keep the sideways range intact and take Tata Steel higher to ₹500 levels again. The broader view remains the same. A breakout on either side of ₹460 or ₹520 will decide the direction of the next move. A strong break above ₹520 will see the stock moving up to ₹550 and ₹560. On the other hand, if Tata Steel breaks the current range below ₹460, it will come under renewed pressure. Such a break will bring back the long-term downtrend that has been in place since 2018. It will also increase the likelihood of the stock tumbling to ₹400 levels. The move below ₹460 could be sharp and swift.

Index Outlook

The display screen on the facade of the Bombay Stock Exchange (BSE) building in Mumbai on May 23, 2019. Modi and his party were off to an early lead as vote counting began The BSE sensex cross 40.000 points. Photo By. Paul Noronha

The Sensex and the Nifty witnessed an anticipatory rally in the initial part of the week, ahead of the Budget. With the Budget now behind them, investors will turn their attention towardsthe first quarter earnings that will kick off on Friday. On the global front, the FOMC minutes, US Jobless claims and the US-China trade talks are key events to watch out for. Click here to read the index outlook for the week

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