Banks and IT Drag Nifty Down! Nifty IT Falls 3.5%. Key Supports are Away - Post Market Analysis

NIFTY opened the day at 17,188 with a huge gap-down of 370 points. On August 4, the index fell nearly 2% from the day high and amazing buying was seen at 17,160 levels. Today, Nifty took support at 17,165 just after the opening and bounced back. NIFTY couldn’t break the 17,350-400 resistance zone and closed the day at 17,312, down by 246 points or 1.40%. 

BANK NIFTY started the day at 38,111 with a gap-down of 875 points. After the initial fall, the index took support blow 38,000. From there, it consolidated in a tight 140 pts range. Bank Nifty ended the day at 38,276 down by 246 points or 1.40%.

Nifty Bank (-1.8%), Nifty Finserv (-1.6%), Nifty IT (-3.5%), Nifty Media (-2%), Nifty Metal (-1.5%) and Nifty PSU Bank (-1.6%) fell the most. Nifty FMCG (+0.39%) closed in the green.

Major Asian markets except for China closed in deep red. European markets are trading around 1% down.

Today’s Moves

The market moving down and people moving their money to FMCG defensive stocks.

Britannia (+1.5%), Nestle (+1.3%), Tata Consumer (+0.52%), ITC (+0.21%) and HUL (+0.17%) featured in the Nifty 50 Top Gainers list.

On Friday, big tech giants from America including Amazon, Apple, HP, Google, and Microsoft fell by around 5%. And this was copied by our IT stocks also. 

TechM (-4.6%), Infy (-3.9%), Wipro (-3%), HCL Tech (-2.9%), and TCS (-2.7%) featured as Nifty 50 Top Losers.

All the Nifty Bank stocks except IDFC First (+0.41%) closed in the red. Axis bank (-2.1%), HDFC Bank (-1.7%), ICICI Bank (-1.7%), Kotak Bank (-2.7%) and SBI (-1.7%) closed in the red.

Reliance (-0.78%) made multiple announcements today during its AGM. Jio 5G services will be launched on Diwali 2022. Also, Reliance is entering the FMCG business this year. 

Tracking the fall in global metal prices and weak finished steel sales, Hindalco (-2.2%), JSW Steel (-2.6%), Jindal Steel (-0.86%), SAIL (-2.1%)and Tata Steel (-2.3%) moved down.

IRCTC (-3.7%) opened with a huge gap down of more than 6% and recovered later. Media reports say that Govt. has dropped the OFS (Offer for Sale) plan due to the volatile market condition.

IDFC (+2.7%), Adani Power (+5%- UC) recovered more than 10% from the day’s low.

Defence stocks- BEL (+1.1%), HAL (+0.70%), Cochin Shipyard (+3.1%), and BHEL (+2.3%) closed in the green on Defence Ministry’s plan to be self-reliant.

Markets Ahead

Tracking the weakness in the global market, our market also opened with a huge gap-down today. 

US market closed in deep red on Friday after Fed Chair Jerome Powell's comments during the Hole symposium indicated higher interest rates for a longer time.

Today Nifty took support from 17,160 levels and this support can be easily broken. On the downside, we can watch the 16,750-800 support zone for now. Even if Nifty moves up, 17,450, 17,480, and 17,500 levels should be a huge resistance for the short term.

Today, it was actually a consolidation phase for Bank Nifty after the gap-down opening. We all know that consolidation finally leads to momentum building. Due to the current market conditions, we are considering 36,800 as the major support.

For HDFC Bank, 2320 should act as good support.

Another highlight of the day was Reliance AGM. Mukesh Ambani concluded his speech by seeking blessings for next-gen leaders— Isha, Akash and Anant. This has raised some concerns. 

Anyway, they had many big announcements for Jio, FMCG business, Retail and Energy divisions. Reliance is planning to double its value by the end of 2027, just 5 years away. Reliance is again diversifying its business. Our portfolio also should follow this path.

Hey fam, the market won't go up in a straight line. They always move sideways, reverse, and fall. On the broader view, our economy is doing fairly well. Trade with patience and stay invested in fundamentally strong stocks.

Which product from Reliance to date is the worst one? Let us know in the comments section of the marketfeed app!