Dalal Street Corner: IT, auto stocks help benchmarks snap 3-day losing streak despite heavy sell off; what should investors do on Friday?

A good buying interest seen in IT and auto stocks helped the market close flat with marginal gains on Thursday as profit-taking hit Dalal-Street in the closing hours. Benchmarks returned to the green zone after they declined for three consecutive sessions earlier. Nifty IT and Auto indices settled with 2.07% and 0.42% gains as Tech Mahindra, Hero MotoCorp, Infosys, Wipro, HCL Tech, TCS, Mahindra & Mahindra and Maruti led the recovery on the benchmark indices. Tech Mahindra gained over 4% on both the indices.  

Meanwhile, Nifty50 gained 0.03% as the index slipped below 16,700 to 16,683, while the Sensex added over 30 points to settle near55,700 even though the benchmarks rose more than one and half per cent in the early trade on Thursday. . 

Nifty midcap managed to end in the green, while small cap index dropped 0.75%.  

"The fear of an aggressive rate hike by the Fed was the prime reason for global volatility during the past few days. Fed’s decision to remain less hawkish with a 50bps rate hike downplayed the investor’s worries, helping the global markets to rally," said Vinod Nair, Head of Research at Geojit Financial Services. 

However, the domestic market trimmed its gains towards the end of the day following a sell-off in US futures, the expert added.  

Rupak De, Senior Technical Analyst at LKP Securities, said Nifty failed to give a decisive breakout on Thursday as the blue-chip index largely traded range bound.  

"The benchmark Nifty failed to give any decisive move as it remained within the previous day's range. On the daily chart, Nifty has formed an inside-day bar, suggesting indecisiveness," said the expert. 

He said daily RSI is in bearish crossover. "The trend remains weak. At the lower end, support is seen at 16600, whereas resistance is visible at 16950-17000," added Rupak De.  

Earlier, US equities rallied, recording the biggest one-day gain since 2020, after Federal Reserve comments suggested that the central bank is unlikely to consider a higher interest-rate hike of 75 basis points in the coming months. 
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"US markets closed higher yesterday (Wednesday) after the Fed announced interest rate hike of 50 bps. Jerome Powell said 75 bps hike is not something that the committee is actively considering. This statement led to market rally," said Mohit Nigam, Head - PMS, Hem Securities. 

Meanwhile, Foreign institutional investors continued to be net seller as they offloaded shares worth Rs 3,288.18 crore on Wednesday, showed stock exchange data.