Wipro, Infosys shares shine as Sensex slumps

Wipro, Infosys shares shine as Sensex slumps

Infosys and Wipro from the IT industry were trading in the green on Friday morning, even as the benchmark indices and broader markets were trading in the red. The Infosys share opened at Rs 976 and went on to hit the day’s high of Rs 997 on NSE. Asian Pants, L&T and ONGC plunged by more than 2%. Sensex shed more than 300 points, while the Nifty had hit a low of 9,704 in the morning trade. The Sensex opened at 31,355 and soon dived to the day’s low of 31,194.87.

The markets opened in red following a sharp correction in US stocks overnight on escalating geopolitical tensions. A ripple effect caused the Asian markets to decline by more than 1%.

Asian Paints & L&T plunged more than 2% in the morning trade, while Maruti, Adani Ports, NTPC, Cipla, HDFC Bank, Hero Motocorp shares lost more than 1% of their value. Within a few minutes of opening Wave of red sweeps over market at opening, major indices had shed 1%; Nifty Midcap Index loses over 2% in opening trade.

Many experts had seen the correction coming. Technical analysis experts see the Nifty correcting by as much as 5-7% in a couple of months. Nifty fell below the 9,800 mark for the first time since 18th of July at close yesterday. At the end of Thursday, Nifty closed at 9,820.25, down by more than 87 points. The BSE Midcap and Smallcap indices lost more than 1 percent for the third consecutive session yesterday.

According to Ruchit Jain, a technical analyst with Angel Broking, “ We expect markets to consolidate in near term. During this consolidation phase, the index could correct upto the previous breakout level of 9700, which could now act as a support as per the role reversal technique of Technical Analysis.”

Speaking to FE.com, Ruchit Jain pointed out that, Since January 2017, the Nifty index has rallied significantly from 7,894 to the recent high of 10,138 without any meaningful correction. According to him, so far the corrections within this uptrend were time-corrections rather than price corrections.

Commenting on the monthly charts, Ruchit explains, “if we observe the monthly charts, the index has reached the ‘Upward Sloping Trend Line’ resistance. This coincides with the 100% ‘Price Extension’ as well as ‘Time Extension’ of the previous up move from 7,893.80.” Ruchit believes that on the flipside, the index is likely to face resistance in the range of 9950-10050 on any pullback moves. According to him, this corrective move is a part of the broader uptrend and thus, long term investors should use such corrective dips to accumulate quality stocks in their portfolio.