Domestic equity indices BSE Sensex and NSE Nifty ended lower as bears took over Dalal Street. The markets extended their losses intraday as Sensex gave up the 62,000 level, losing 800 points, settling at 61,799 while Nifty tanks 1.14% to close at 18,414 on the weekly F&O expiry. The fall comes as US Federal Reserve Chairman Jerome Powell signaled continuing rate hikes to combat inflation.
The Bank Nifty index snapped its two-day streak of hitting record highs, plummeted 659 points to end below the psychological level of 44,000 at 43,498 owing to profit booking. The broader markets and sectoral indices also wiped their gains, with Nifty IT plunging over 2%. Rising covid cases in China also affected the market mood as the strict lockdown will hurt the global markets. Britannia Industries, Hero MotoCorp, NTPC, SBI Life and Sun Pharma were the day’s top gainers on Nifty 50 while TechM, Titan, Infosys, Grasim and Eicher Motors were the top losers.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
The US Fed effect led to a massive sell-off in the markets as banking, IT, metal & realty stocks received severe pounding at the hands of investors. Markets were disappointed after the Fed indicated that the rate hike regime would continue next year, which further accentuated the already fragile market sentiment prompting investors to trim their equity exposure.
Santosh Meena, Head of Research, Swastika Investmart
Nifty Indian equity market witnessed sharp profit booking after hawkish commentary along with 50 basis rate hike by US Fed chairman Jerome Powell. The US market didn’t react too much yesterday, but Dow futures were trading lower during the day. Anecdotally, the US market reacts to important events on the next day, and our market tries to assume their overnight move.
Technically, Nifty witnessed lower highs with clsoing below 20-DMA with big red bar which is a bearish sign however 18325-18250 is an immediate support zon that bulls will try to protect. 18100 and 18000 will be the next important support levels. On the upside, 20-DMA of 18530 will now act as a key hurdle; above this, the bearish setup will nullify and market may resume its bullish momentum. 18730/18800/18888 will be the next resistance levels.
The leader of the current bull market, Bank Nifty, witnessed an evening star candlestick formation and closed below its 9-DMA for the first time in two months. A 20-DMA of 43200 will act as an immediate support; below this, there is a risk of profit booking, where 42625 will be the next support level.