Dalal Street Corner: Volatility, profit booking pull down market 2nd day in a row; what should investors do on Friday?

The Indian markets ended marginally lower for the second day amid selling pressure from banking, consumer durable and oil & gas stocks and concerns surrounding Russia-Ukraine crisis. Benchmark Nifty closed lower by 0.10% as 17 shares advanced and 13 declined on the 50-share index.  

Similarly, barometer Sensex too shed over 100 points to end below 58,000-mark as 12 shares gained, while the remaining 18 ended in the red.  

Banking stocks declined the most as ICICI Bank, IndusInd Bank, Axis Bank, State Bank of India and HDFC Bank were among major losers on Thursday. HDFC Limited, Hindustan Unilever, Tata Consumers, ONGC, Reliance, HDFC Life, Power Grid, Tech Mahindra and L&T were among top gainers on Thursday.   

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In the broader market midcap and small cap indices corrected between up to 1 per cent, while  Pharma, media and healthcare sectors were seen under tremendous pressure.  

Experts place crucial support for Nifty around 17,100 and resistance is seen at 17,500.  

We have collated views of market analysts who speak about current market trend and suggest what investors should do going forward. 

Ruchit Jain, Lead Research, 5paisa.com   

Nifty started the day marginally positive but it witnessed some selling pressure led by the banking and financial stocks. The index was unable to see sustained intraday pullbacks and it finally ended with a loss of about quarter of a percent.   

Traders are vigilant on the development of the Russia Ukraine cross border issue which is leading to higher volatility. On the index front, 17100-17000 will be seen as the immediate support range while 17500 is the resistance. We could continue to see some higher volatility within this broad range while a breakout on either side beyond the mentioned boundaries will lead to the next directional move. Until the index gives a clear breakout, we continue with our advice for short term traders to avoid aggressive positions and trade with proper risk management.     

Mohit Nigam, Head - PMS, Hem Securities    

Benchmark indices logged losses for the second consecutive session, dragged by banks, consumer durable and oil & gas stocks. This is due to following a decline in US Futures and rise in crude prices to back above $94 per barrel. Also, due to uncertainties between Russia and Ukraine, domestic equities struggled to maintain stability.  

US futures declined following the release of the FOMC meeting minutes, where the Fed officials outlined plans for an interest rate hike and said that the unwind of the bond portfolio could be aggressive. Continued selling by FII in the domestic market can increase cautiousness in investors in near future.  

Crucial support for Nifty 50 is 17,100 while Nifty may face some resistance at 17,550.  

Palak Kothari Research Associate Choice Broking  

On the technical front, the index has been trading with lower highs & lower lows which points out a weakness for an upcoming session. Furthermore, the index has traded below the middle band of Bollinger which suggests downside movement in the counter. On a daily chart, the index has been trading below 21*50-DMA with the negative crossover which suggests weakness for the next session.  

Moreover, the daily momentum indicator Stochastic & MACD were also trading with a negative crossover which adds weakness in prices. At present, the index has support at 17130 levels breaching below the same can show further downside till 17000-16800 levels while resistance comes at 17500 levels. On the other hand, Bank nifty has support at 36800 levels while resistance at 38500 levels.   

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.  

Domestic equity remained volatile as uncertainty continued around Ukraine- Russia scenario as well as weekly Index expiry. Nifty opened positive but was unable to sustain at higher levels and nosedived into red.  

The index witnessed wild swings before ending the day with minor loss of 18 points at 17,305 levels. Broader market underperformed and closed with loss of 1%. Except for FMCG and Oil & Gas, all other sectors ended in red, with Nifty bank being top laggard down 1%. India VIX rose 6.9% at 22 levels.   

Global markets remained on edge after flare up in geo-political tensions between Russia and Ukraine. On the positive side, the Fed minutes indicated that while the central bank intends to shortly begin raising interest rates, its decisions would be data-dependent.     

Equity markets have seen rise in volatility in the last couple of days due to varying news flows coming in from Ukraine border. Nifty has been trading in a broader range of 16,800-17,400 and needs a decisive breakout on either side for clear direction. For now, investors will have to navigate their way through the Ukraine crisis and rate hike environment to stay on course.  

Vijay Dhanotiya, Lead of Technical Research at CapitalVia Global Research Limited   

The market witnessed another volatile movement and an attempt to hold the market above the levels of 17200. 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 sustains above the support levels, we expect a recovery in the market. We have observed the momentum indicators like RSI and MACD indicating positive side recovery in the market.   

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)