Broader indices come under major selling pressure

New Delhi, May 6,2024:  PSU bank stocks underperformed on Monday reacting to stricter RBI norms on lending to projects under development.

Among PSU banks, PNB was down 6.4 per cent, Canara Bank was down 5.4 per cent and SBI was down 2.8 per cent.

Vinod Nair, Head of Research, Geojit Financial Services, said the domestic indices traded in a range-bound manner influenced by PSU banks’ underperformance due to the RBI’s tighter norms on lending to projects under development.

The broader indices also witnessed major selling pressure due to valuation concerns and profit booking, he said.

“Globally, weaker US payroll data has increased expectations of potential Fed rate cuts. Investors are closely monitoring this week’s Fed speakers for insights on future monetary policy,” he said.

Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, said the Bank Nifty index underwent a sideways trading session, with bulls successfully defending the support zone around 49000-48900. Immediate resistance is noted at 49300, and a decisive breakthrough could trigger short-covering moves towards 49500.

Analysts said the Nifty traded sideways with the sentiment being subdued. Rupak De, Senior Technical Analyst, LKP Securities, said Nifty mostly traded sideways throughout the day, fluctuating between 22400 and 22550.

Although the index ended above the short-term moving average, the 21EMA, on the daily chart, the sentiment appears somewhat bearish due to consecutive red candles, suggesting a prevalence of sellers over buyers, he said.

“In the near term, sentiment could stay subdued as long as it stays below 22500. On the downside, there’s a possibility of the index sliding towards 22300,” he said.


Leave a Reply

Your email address will not be published. Required fields are marked *