Domestic equity market extended losses for a second straight session today, as expectations of the RBI cutting interest rates next month were dampened after inflation picked up in October. The BSE Sensex closed 91.69 points, or -0.28 per cent, down at 32,941.87 today, while NSE Nifty index slipped below its crucial psychological level of 10,200 and settled 38.35 points, or -0.38 per cent, down at 10,186.60 today. As many as 32 components of the index settled in the red.
The consumers price index (CPI)-based inflation came in at 3.58% for October, its seven-month high, while wholesale price index (WPI)-based inflation stood at 3.59%, its six-month high. Given higher oil prices, likely above-4 per cent inflation in coming quarters and risks of a fiscal slippage, the Street expects the RBI to stay on hold through 2018, including at the December 6 policy meeting. Meanwhile, subdued Asian markets also impacted market mood.
The Nifty50 remained weak and tested the next major support at 10,178 today. It has been making lower highs and lower lows for last six sessions and needs to negate the same to get the short-term stability in the market. The index formed a bearish pattern today while supports shifted lower. The Nifty50 continued to sustain below its 20-day SMA, which signals loss of strength, and we can see a correction towards 10,115-10,100 levels, which coincides with its 50-day SMA. Some pullback action from this support zone towards the 10,280 level also cannot be ruled out in the near term.