Indian benchmark indices NSE Nifty and BSE Sensex opened green, however the indices fell half a percent as bears fought for dominance. While Sensex sank 254 pts to 60,812, Nifty 50 ended at 0.4% lower at 18,113. Bank Nifty settled in red, below the 42,500 mark. Majority of Sensex stocks closed in the red, with Bajaj Finserv, M&M, IndusInd Bank and Tata Motors losing the most in trade. The broader markets and sectoral indices closed down, as Nifty PSU Bank and Nifty Auto lost 1.23% and 1.11% respectively.
Market behavior decoded: RBI MPC minutes, Covid dampen sentiment
“Positive sentiments from the global markets failed to bolster optimism in the domestic indices. The losses were extended in domestic equities owing to the hawkish comments from the RBI’s MPC minutes, which suggested that a premature pause in rate tightening would be a “costly policy error at this juncture”. On the other hand, better-than-expected earnings in the US amid recession fears and strong consumer confidence readings lifted global sentiments.” – Vinod Nair, Head of Research, Geojit Financial
“Markets continued their downward journey even today despite a steady opening and absence of data on any new strain other than the sub-variants of Omicron elsewhere. With the force of gravity reversing on the back of rising interest rates and with PE expansion hard to come along, the street seems to prefer staying a bit light ahead of the new calendar year and earnings season. All sectoral indices ended in the red during today’s trade.” – S Ranganathan, Head of Research, LKP Securities
“Markets succumbed to losses for a second straight session as rising Covid cases in China and Japan continued to dampen sentiment, prompting investors to prune their exposure in metals, auto and realty shares. However, other Asian and European indices maintained their upward bias, which shows that valuations are quite high and the current global uncertainty and other risk factors doesn’t justify the higher valuations.” – Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Nifty Technical Outlook: 18,050 key support zone
“Technically, the Nifty is trading near the 50-day SMA but intraday texture is indicating strong possibility of a quick pullback rally from the current levels. For Nifty, 18,050 would be the key support zone for the market and if the index trades above the same it could move up to 18,300-18,350 levels. On the flip side, dismissal of 18,050 may trigger further selling pressure and below the same, the index could slip till 17,950-17,930.” – Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities