Benchmark equity indices BSE Sensex and NSE Nifty extended their losses for a third straight session today as widening trade deficit to almost 3-year high weighed on market sentiment. The 30-share BSE Sensex closed 181.43 points, or -0.55 per cent, down at 32,760.44 today, while NSE Nifty index settled 68.55 points, or -0.67 per cent, down at 10,118.05 today, with 37 out of 50 components ending in the red.
The equity market extended its corrective spell and continued to end in the red today, as the benchmark Nifty50 closed down. Though we did see some modest recovery in the end, but the Nifty index still closed below the 10,180-10,200 support area. The Nifty has taken support at its 50-DMA, which stands at 10,120, and this level remains a crucial one to watch for at closing levels. Globally, Asian stocks stumbled after weaker crude oil prices took a toll on Wall Street, while the euro kept big gains after enjoying a boost from robust German economic growth.
Going into trade on Thursday, we can expect a modest start to the trading day but throughout, it would be extremely crucial for the Nifty to crawl back above the 50-DMA, and reach back towards 10,180-10,200, which will now act as modest resistance for the Nifty. The 50-pack index formed a large bear candle pattern on the daily chart today. It has been making lower highs and lower lows for last seven sessions and needs to negate the same to get short-term stability in the market. By closing below the 10,170 level, the index breached a crucial support which it had established over the past few weeks. Now, if it sustains below 10,170, weakness could continue and drag the Nifty50 towards 10,080 and then 10,000 levels.