Rise in Covid cases, rate cut uncertainty subdues equity market

Mumbai : A rise in Covid-19 cases, along with uncertainty over the Reserve Bank’s rate cut decision, subdued the Indian equity market on Monday.Consequently, both the main indices fell for the fourth straight day on Monday.Sector-wise, the top gainers were the BSE CD, Healthcare and Metal indices, while the losers were the BSE Bankex, Oil and Gas and Realty indices.Index-wise, the NSE Nifty50 closed at 10,891.60, down by 181.85 points or 1.64 per cent from its previous close.The Sensex closed at 36,939.60, lower by 667.29 points or 1.77 per cent from the previous close of 37,606.89.It had opened at 37,595.73 and touched an intra-day high of 37,596.02 and a low of 36,911.23 points.”Technically, with the Nifty correcting sharply and closing below the short term trend reversal levels of 11,056, the short term trend has now turned down,” said Deepak Jasani, Head of Retail Research at HDFC Securities.”Downside targets are now at 10,600, which coincides with the 200-day EMA. Any pullback rallies in the coming sessions could find resistances at 11,100-11,150.”According to Vinod Nair, Head of Research at Geojit Financial Services: “Indian benchmark indices closed in the negative with losses, following mixed global cues. As virus cases continued to rise and with the uncertainty regarding rate actions by the RBI, markets succumbed to the momentum slowdown visible in the last couple of trading sessions.”The MPC is expected to release its resolution on the monetary policy after their meet August 4 to 6.”Losses were led by financials. Although momentum has slowed down, stock specific action is still happening, dependent mainly on the earnings results and commentary,” Nair said.”As long as the markets hold the current range, these downturns could be short-lived and should be utilised to accumulate quality stocks.”