Bloodbath on Dalal Street as Sensex closes deep in red, Nifty support now in 16800-16900 range

Broader markets fared worse than headline indices as smallcap and midcap indices ended more than 3% lower.

S&P BSE Sensex dived 889 points or 1.54% lower to at 57,011 while NSE Nifty 50 closed 263 points or 1.53% to settle at 16,985. (Image: REUTERS)

Domestic markets witnessed a bear attack on Friday amid weak global cues while adapting to the hawkish stance taken by global central banks. S&P BSE Sensex dived 889 points or 1.54% lower to at 57,011 while NSE Nifty 50 closed 263 points or 1.53% to settle at 16,985. Broader markets fared worse than headline indices as smallcap and midcap indices ended more than 3% lower. IndusInd Bank was the top laggard of Sensex, down 4.7%, Kotak Mahindra Bank followed close along with Hindustan Unilever and Titan. Infosys was the top gainer, up 2.91%, accompanied by HCL Technologies, Power Grid, and Sun Pharma.

Deepak Jasani, Head of Retail Research, HDFC Securities –

“From the top of 18604, each of the Nifty’s fall has been sharper than the preceding rises with two weeks of rise getting nullified in just one week. This clearly shows the sell-on-rise behaviour of institutional investors and smart traders. The advance-decline ratio dipped sharply to 435:1605 on the NSE on Friday. Now Nifty is close to the previous supports of 16722-16891. On bounces, 17192 could be a resistance. On weekly basis, Nifty fell 3%, formed a bearish Engulfing pattern and closed near the week’s low. In the process, the Nifty logged its second-worst week in 10 months.”

Rohit Singre, Senior Technical Analyst at LKP Securities

“Index again closed a week in negative at 16985 with loss of nearly three percent and formed a bearish candle on the weekly chart after two consecutive small bullish candles. The index has breached strong support zone of 17k mark & went below that which hints cautious stance on market, now immediate support for nifty is coming near 16900-16800 zone if said levels break then we may see more drag down in nifty & resistance is coming near 17070-17180 zone until we don’t sustain above said strong hurdle zone we may not see aggressive buying move.”

Yesha Shah, Head of Equity Research, Samco Securities –

“Bank Nifty index closed the week on a negative note, facing resistance around 37,300 levels post a brief bounce. While there is no evidence of bullish momentum, Bank Nifty is trading at crucial support that coincides with its rising trend line. The previous resistance of 35,600 is now acting as a strong demand zone, thereby offering a good risk-reward opportunity on the long side. Even the benchmark index Nifty is consolidating around crucial price levels. Support and resistance for Bank Nifty are now placed at 35,500 and 37,500 respectively while those for Nifty are placed at 16,900 and 17,600 respectively. Traders can maintain a neutral outlook and trade with tight stop losses below immediate supports for long positions.”

Palak Kothari, Research Associate, Choice Broking –

“On the technical front, the index has formed Open Bearish Marabozu Candle on a weekly chart which points out the weakness in the counter. Moreover, 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. At present, the Index has support at 16900 levels while resistance comes at 17300 levels. On the other hand, Bank nifty has support at 35300 levels while resistance at 36600 levels.”

Vinod Nair, Head of Research at Geojit Financial Services

“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, the 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.”

Ajit Mishra, VP – Research, Religare Broking –

“Apart from the policy tightening, a sharp rise in the COVID cases globally has renewed participants’ worries and we feel it may aggravate further in absence of any major positive. On the index front, Nifty is likely to retest the previous swing lows and the 16,900-16,700 zone would be critical. Participants should align their positions accordingly and prefer hedged bets.”

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