FPIs likely to remain sellers putting pressure on banking stocks

The volatile situation in West Asia because of Palestine conflict though being largely ignored by the market now, can pose additional near-term challenges. FPIs are likely to remain sellers putting pressure on banking stocks which constitute the major share of their AUM and this provides an opportunity for domestic investors to buy these stocks which are available at fair valuations, according to V.K. Vijayakumar, the Chief Investment Strategist at Geojit Financial Services..

The US 10-year yield hovering around 5% continues to be a headwind for equity markets. Latest data shows that India's food grain production is at record high and this can keep food inflation under control. The implication is that the MPC will go for a long pause and this is favourable for banking stocks.

Vaishali Parekh, Vice President of Technical Research at Prabhudas Lilladher, said Nifty once again failed to move past the resistance levels of 19,850 zone and finally slipped in with heavy profit booking witnessed to slide below the 19,700 zone with bias turning weak and sentiment maintained with a cautious approach.

Technically, once again as mentioned earlier, the index would have the near-term support zone of 19,600 levels of the significant 50EMA zone breaching which one can anticipate for intensified selling pressure with next major support visible near 19,200 zone.

The support for the day is seen at 19,500 levels while the resistance is seen at 19,800 levels, Parekh said.

BSE Sensex is down 164 points at 65,464 points on Friday. ITC is down more than 2%, HUL is down more than 1%.