Dalal Street Corner: Sensex, Nifty slipped 3% this week – What should investors do on Monday?

Amid the massive selling pressure, the Indian markets closed Friday’s session on a negative note a day after positive closing on Thursday. The Sensex fell over 1000 points from the day’s high, while the Nifty50 gave key sentiment support of the 17000-mark at the market close. 

The decline was mainly led by Banking, Financials, Auto, FMCG and Metal as each slipped between 2-3 per cent dragging the market most. However, led by positive cues from the Accenture Q1FY22 earnings, the IT sector has become the only gainer in otherwise bad market on the last day of week. 

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Underperforming than benchmarks, the broader markets also saw a massive decline as both mid and small-cap fell by over 2.5 per cent. While the Nifty Bank, a key contributor to the Nifty50’s fall, closed over 2.5 per cent down to 35618 –level on Friday. 

The market breadth improves slightly from opening but remains in favour of declines; advanced-decline ratio at 1:4. Mere 5 stocks closed in the green, while 45 in the red on the Nifty at the close. 

At the close, Wipro became the top gainer, up by almost 5 per cent, followed by Infosys up nearly 3 per cent, while IndusInd Bank, Tata Motors, ONGC, Kotak Bank and HUL dragged the market most between 3-5 per cent on Friday. 

The benchmark indices shed 3-4 per cent this week following today’s correction; while broader markets indices closed this week down 4 per cent. the majority of Nifty stocks end lower this week with Bajaj Finserv leading losses, followed by ITC after its maiden analyst day on Tuesday. 

While Wipro, Power Grid, Infosys, Tech Mahindra and Sun Pharma are the top gainers this week up 1-5 per cent. 

S Ranganathan, Head of Research at LKP securities said, “Earnings beat together with revised growth guidance by Accenture however helped the IT Index gain almost 2 per cent during the afternoon on a day when almost every other sectoral index ended deeply in the red.” 

“The Midcap & Smallcap Indices were pounded as investors stayed back today amidst a hawkish FED and rising domestic inflation data,” Ranganathan added. 

On the technical front, the index has formed Open Bearish Marabozu Candle on a weekly chart which points out the weakness in the counter, Palak Kothari, Research Associate at Choice Broking said in post market comment on Friday. 

Kothari added that the index has given a breakdown of rising trendline as well as trading below 21&50-DMA which adds bearish momentum for the next day.  

A momentum indicator Stochastic suggested negative crossover on the daily time-frame, which confirmed a bearish move for the upcoming session, as per the analyst. 

At present, the Index has support at 16900 levels while resistance comes at 17300 levels. And, Bank Nifty has support at 35300 levels while resistance at 36600 levels, the analyst also said. 

Vinod Nair, Head of Research at Geojit Financial Services, said, “Weak global sentiments inundated domestic indices as markets are digesting the hawkish stance of major international central banks amid surging omicron cases.” 

“While the European Central Bank took a small step in rolling back the crisis-era stimulus although holding down borrowing costs next year, Bank of England surprised the markets by raising interest rates for the first time since the onset of the pandemic. Continued FII selling created tension among domestic investors. Barring IT, all sectors bled,” Nair said in his post market comment.