Key indices hovering in correction mode

Benchmark indices, Sensex and Nifty, fell for the third day running on Thursday, dragged by continuous selling in HDFC Bank and profit-taking in consumer durables and utility shares.

The 30-share BSE Sensex fell by 313.90 points or 0.44 per cent to settle at 71,186.86. During the day, it tanked 835.26 points or 1.16 per cent to 70,665.50. The Nifty declined 109.70 points or 0.51 per cent to 21,462.25. During the day, it plunged 286.4 points or 1.32 per cent to 21,285.55. The heavy fall in the markets comes on the back of a recent record-breaking rally. The BSE benchmark hit an all-time high of 73,427.59 on Tuesday, and the Nifty also reached its lifetime peak of 22,124.15 the same day. In three days, Sensex lost 2,141 points or nearly 3 per cent, while Nifty retreated by 635 points or 2.89 per cent to fall below the key support level of 21,500 points.

In two days, HDFC Bank stock has slumped 11.44 per cent and its mcap eroded by Rs1,45,889.59 crore to Rs11,28,850.63 crore.

“The benchmark indices exhibited recovery from the day's low and ended in red amid weak global cues, as investors are trimming bets on rapid FED cuts due to strong US retail sales and the resulting rise in global bond yields. Furthermore, oil price advances and rate escalation risks have led to disruptions in global shipping and crude production. The broader market continued its selling pressure given the elevated valuation and profit booking with an aim for sector rotation,” said Vinod Nair, head (research), Geojit Financial Services.

“Nifty couldn’t defend the short-term moving average i.e. 20 EMA on the expected lines and came closer to the next crucial support of 21,200 level. Indications are now in favour of some consolidation after the recent fall and any rebound to 21,700-21,850 would attract fresh shorts,” Ajit Mishra, SV-P (technical research), Religare Broking Ltd.