Closing Bell: Nifty slips below 17,200, Sensex ends lower by over 700 points; banking, metal stocks top laggards

Snapping a two-day winning streak, the domestic equity market ended in the red on the last trading session of the week. Benchmarks Nifty50 and the Sensex dropped more than 1% amid huge selling pressure in banking and financial stocks on Friday.  

The broader Nifty50 slipped below 17,200, while the 30-share Sensex shed over 600 points to end near 57,200. The two indices closed at 17,171.95 and 57,197.15 respectively.  

In the broader market, Nifty midcap and small cap ended lower by 0.9% and 0.3% respectively.  

Sector-wise, all sectors on the NSE turned red on Friday with maximum pressure seen on banking, financial, metal, pharma and healthcare stocks.  

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The Indian equity markets have been gyrating in the past few days after a healthy pullback witnessed since the geopolitical crisis-led lows seen in the early part of March. While the headline indices seem to be in a consolidation mode, the larger activity seems to have shifted to the broader markets, with a large number of small caps and midcaps seeing greater market participation, especially in select sectors such as Sugar, Fertilisers, Textiles, Paper, etc," said Milind Muchhala, Executive Director, Julius Baer.

The markets seem to be slightly cautiously positioned, as the Q4FY22 earnings season has begun on a mixed note with small disappointments from a couple of large sectoral majors, he said. "Hence, investors might prefer to wait out for more results to be announced and hear out the accompanying commentaries to gauge in case there are any concerns of earnings cuts creeping in. Also, the impending concerns of elevated commodity prices due to geopolitical situation and supply chain challenges, and with increasing expectations of a harsher hike by the US Fed, the market may continue to witness higher volatility in the near term," said the expert.

A prolonged geopolitical situation and elevated prices can gradually start weighing on demand, profitability and growth estimates, he said. "Lastly, the government seems to be getting ready to launch the mega IPO of LIC, which may also put some near-term pressure for the secondary markets due to the large supply of fresh paper. We have been slightly cautious on the markets since the past few weeks and suggest creating some liquidity in the recent pullback, as the uncertainty and volatility is likely to continue for some more time with too many moving parts, providing intermittent opportunities,” he added

Meanwhie, among stocks, Adani Ports, Mahindra & Mahindra, Bharti Airtel, ITC, HCL Tech, Asian Paints, Nestle India and Maruti gained in an otherwise weak market on Friday, while Hindalco, State Bank, Cipla, Dr Reddy's, Hindustan Unilever, IndusInd Bank, Bajaj Finserv, Axis Bank, Infosys and ICICI Bank were among top laggards.