Dalal Street Corner: Markets snap 4-day winning gain, close around 1% lower; what should investors do on Friday

The Indian markets snapped a 4-day winning streak, as both the benchmark indices – Sensex and Nifty50 – shed around 1 per cent amid global sell-off and hawkish US Fed minutes. While the broader market recovered from early losses, as both mid and small-cap indices ended positive.  

The decline was mainly led by information and technology stocks along with banking and financial stocks. The 12-share banking index dragged Nifty, as Nifty Bank closed a little before the 37500-mark. 

UPL ends as top gainer after CLSA raises target and FY22-24 EPS for the stock, while three out of 6 top Nifty50 gainers are auto stocks - Bajaj Auto, Eicher Motors and Maruti end up 1-2 per cent. Similarly, Bharat Forge closed amongst top midcap gainers despite lower class 8 orders (YoY). 

Vinod Nair, Head of Research at Geojit Financial Services said, “Following a sharp fall in western markets, the domestic market witnessed a gap-down opening and extended its losses led by selling in IT, realty and oil & gas shares.” 

The global markets were wounded by heavy selling as Fed meeting minutes pointed to a faster than expected policy rate hike considering elevated US inflation levels, Nair added. 

Investors are also watching the fast spread of covid cases and stricter restrictions being imposed as it would keep the market highly volatile in the coming days, he said in the post-market comment. 

“Technically, Nifty has taken immediate resistance at upper Bollinger Band formation and traded below it. However, on a four-hourly chart, the stock has still been trading above the Horizontal Line, which is an immediate support zone,” Sachin Gupta AVP, Research Choice Broking said.  

“An indicator MACD & RSI is still trading with a positive crossover that supports the bullish trend. At present, the Index has support at 17600 levels while resistance at 18000 levels. On the other hand, Bank nifty has support at 36700 levels while resistance at 38000 levels,” Gupta added further. 

S Ranganathan, Head of Research at LKP securities mentioned, “Bulls were a bit restrained on the back of rising covid cases and its impact on the fourth-quarter corporate performance since it happens to be an important quarter for India Inc.” 

Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services Limited said, “Nifty moved in a volatile way and concluded with losses of around 180 points. It formed a small-bodied Bearish candle on the daily scale with longer lower shadow indicating declines were bought.” 

“It negated its formation of higher highs - higher lows of the last four sessions. Now it has to hold above 17777, for an up move towards 18000 and 18200 whereas support shifts higher to 17600 and 17500 zones,” Taparia said in a post-market comment on Thursday.