Dalal Street Corner: Market falls for 3rd day in row as FIIs remain net sellers; what should investors do on Thursday

Extending weakness for the third straight session, the Indian market close in the red on Wednesday, mainly dragged by information technology and metal stocks. The BSE Sensex closed around 330 points lower and the Nifty50 settled above a sentimentally key level of 17200 today.

Following the benchmarks suite, even the broader markets extended decline as both mid-cap and small-cap dipped by around 0.5 per cent each. Similarly, Nifty Bank, a key contributor to Nifty50, closed negative with minor cuts, down 0.3 per cent to 36789-mark at the market close on Wednesday.

Of the 50 scrips on the Nifty50, 16 advanced, and 34 declined at the market close. Bajaj twins — Bajaj Finance and Bajaj Finserv were the top laggards today, down between 2.5-3 per cent, while Sun Pharma closed as the top gainer, up nearly 3 per cent at the market close.

Banking heavyweight Kotak Mahindra became the only Nifty Bank constituent to end in the green, while ITC gave up opening gains to end 2 per cent lower after its maiden analyst meet on Tuesday. Similarly, stocks like ITC, Wipro, TCS, SBI Life, UPL, and Hindalco each end below 100-DMAs

TVS Motor jumped around 7 per cent intraday to eventually to end up 2 per cent after the company announced an agreement with BMW for its EV strategy. And, Nykaa ends 6 per cent higher after launching skincare brand Elemis on its global store during Wednesday’s session.

In the IPO segment, It’s the last day for Medplus Health IPO to subscribe, the offer so far has been filled 52 times, led by strong demand from NII. While Data Patterns issue on day 2 has been booked 7.6 times, and HP Adhesives that opened today is subscribed 3.5 times on the first day so far. 

Rahul Sharma Co-founder of Equity 99 said that there has been a panic among investors and it looks to have formed a bearish candle.

“The Nifty ending below 17300, which was good support has raised a panic alarm among the investors. Most of the global news and today’s expected FED rate hike have been the reason for the fall. 17050-16900 are major support levels”, the Equity 99 co-founder said in a comment. 

Sharma feels that it will be a major support to bounce back towards 17500 in the coming days and every correction in a few days will work as an opportunity to invest in strong companies’ stocks.

"Anxiety over more anticipated hawkish policy statement by Fed pressurised the domestic indices to fall. Overall, Fed is expected to announce a faster end to its bond-buying campaign and may signal a rate hike in 2022 amid rising inflationary pressure,” Vinod Nair, Head of Research at Geojit Financial Services said, adding further that the foreign investors continued their selling spree.

“The market research suggests that sustaining above 17200 will be an important level for the market to stay positive in the short term. If the market is able to breach the level of 17400, it can witness a positive momentum in the market which can lead to the higher levels near 17600,” Vijay Dhanotiya, Lead of Technical Research at CapitalVia Global Research in his post-market comment said.

A momentum indicator Stochastic suggested negative crossover on the daily time-frame, which confirmed a bearish move for the upcoming session on Thursday, Palak Kothari Research Associate Choice Broking said in a comment.

"At present, the Index has support at 17150 levels while resistance comes at 17400 levels. While Bank Nifty has support at 36300 levels while resistance at 37500 levels,” she added.