Sensex falls amid weakness in banking stocks, analysts eye Nifty to reclaim 22,000 for renewed rally

Domestic benchmark indices the Nifty and the Sensex traded on a muted note on February 12 intra-day deals as investors wait for January inflation numbers. Market experts said time-wise correction would be the norm for the next few sessions, until the Nifty goes past 22,000.

“Nifty’s 21,900-22,000 zone remains a daunting task for the bulls, followed by a sturdy hurdle of 22,100. A decisive breakthrough beyond the mentioned support or resistance zone could only trigger the next leg of the rally in the market,” said Sameet Chavan, Head Research, Technical and Derivative – Angel One.

Sensex fell 317 points or 0.4 percent to 71,278, while Nifty 50 declined 112 points or 0.5 percent to 21,669 on February 12 intra-day trade.

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Vaishali Parekh, Vice President – Technical Research, Prabhudas Lilladher believes that Nifty needs a decisive breach above 21,800 zone to improve overall bias, maintaining a support zone of 21,700. “The support for the day is seen at 21,700, while resistance is seen at 21,950,” she added.

Meanwhile, profit-booking was seen across broader markets, with Nifty Midcap 100 and Nifty Smallcap 100 indices falling up to 2 percent in intra-day deals. Fear gauge, India VIX, too, indicated rising volatility as it hovered above 16 level, up 5 percent.

After broader part of the market saw huge run-up last year, frothy valuations in these segments are a matter of concern, said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. “From a long-term perspective, safety is in largecaps,” he suggested.

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Apart from IT and Pharma sectors that helped limit downside for benchmarks, all others nosedived in the sea of red. Nifty Realty and Nifty Oil & Gas indices were the worst sectoral performers, slipping over 1 percent each on February 12 early deals.

On the other hand, Bank Nifty was down 0.8 percent to 45,233 weighed by Bandhan Bank, PNB, and SBI.

“The charts of Bank Nifty indicate that it may get support at 45,500, followed by 45,300 and 45,000. If the index advances, 45,850 would be the initial key resistance, followed by 46,000 and 46,150,” said Deven Mehata, Research Analyst at Choice Broking.

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