MUMBAI: Indices continued to witness selling pressure led by rate sensitive sectors ahead of Reserve Bank of India’s policy meet. Weakness in Asian markets also dampened sentiments. The market is expected to remain volatile ahead of January F&O series expiry.

“With the derivative expiry, intraday volatility is expected to increase. On price pattern the weekly closing below 4950 would confirm a rising wedge breakdown opening up deeper downside in the market. On the upside move past 5065 is likely to shift the market back to bulls.

At current point, the market looks weak but oversold. Ahead of the monetary policy, interest rate sensitive sectors like banking, auto and real estate are likely to be under pressure while beaten down and defensives like telecom and FMCG are likely to find investor interest. In the telecom space, technical bounce back can be expected in Bharti Airtel,” said Edelweiss report.

Bombay Stock Exchange’s Sensex was at 16,576.32, down 204.14 points or 1.22 per cent. The index touched an intraday low of 16537.28 and high of 16708.60.

National Stock Exchange’s Nifty was at 4942.65, down 65.25 points or 1.30 per cent. The broader index touched a low of 4932.10 and high of 5008.50 in trade so far.

BSE Midcap Index was down 0.79 per cent and BSE Smallcap Index slipped 0.89 per cent.

“The near term is weak as Nifty is below its short term 5, 20 & and 50 moving average of 5,018 5205 and 5119 respectively. There is a possibility that markets could fall further by 5% from current level depending upon the global news and corporate earnings but what we feel is that these falls can be utilized as a buying opportunity from an investment perspective.

Strong support for Nifty is at 4,935-4,900 and on the higher side 5,000 is the important point to be breached and sustained for a major uptrend to emerge,” said Nirmal Bang report.

Amongst the sectoral indices, rate sensitives led the decline ahead of Reserve Bank of India’s policy meet. BSE Auto Index was down 2.74 per cent, BSE Bankex fell 2.61 per cent and BSE Metal Index slipped 2.40 per cent.

Mahindra & Mahindra (-4.42%), Tata Motors (-4.35%), Hero Honda (-4.21%), ICICI Bank (-3.68%) and SBI (-3.50%) were the top Sensex losers.

ITC (1.49%), Reliance Communications (0.67%), Reliance Industries (0.27%), Tata Power (0.24%) and TCS (0.03%) were the only index gainers.

Market breadth was negative on the BSE with 1738 declines and 804 advances.