Indian benchmarks closed in red after a volatile session of trade amid weak global cues. The BSE Sensex closed over 200 points lower, at 62,626 while NSE Nifty settled 0.3% lower at 18,642. In the broader markets, the NSE MidCap 100 was down 0.46%, and the SmallCap index ended marginally in red. All sectors faced losses, barring Nifty PSU Bank, Nifty FMCG and Nifty Oil & Gas. “Bears kept pushing domestic indices lower amid unfavorable global cues, with significant selling in metals and IT stocks. The mood was dampened by renewed concerns over policy tightening by the Fed in response to strong economic data out of the US. However, while easing COVID curbs in China benefited the demand outlook, fresh sanctions on Russian oil further added volatility to global oil markets. Investors at home await the RBI policy meet tomorrow, which is expected to slow the pace of rate hikes, in light of easing food prices,” said Vinod Nair, Head of Research, Geojit Financial Services.
Rupak De, Senior Technical Analyst, LKP Securities
Investors mostly remained on the sidelines as they preferred waiting for the RBI monetary policy announcement. The Nifty found support around the previous low before closing a bit higher. The trend may remain sideways as long as the index remains within the bands of 18,600-18,800. Any decisive move on either side will induce a directional move.
Deepak Jasani, Head of Retail Research, HDFC Securities
Nifty opened gap down and remained in a range through the day before closing 0.29% or 54.3 points lower at 18,642. Negative Asian cues pushed Indian indices lower. Broad market indices fell even more as the advance decline ratio fell to 0.7:1. IT stocks came under selling pressure following overnight weakness on Nasdaq and fears of continued rate hikes despite the fact that India Rupee fell about a percent on Dec 06. Global markets struggled for direction Tuesday as traders weighed prospects for a slowdown in the pace of US rate hikes against data that shows tighter policy may be needed for longer.
The World Bank on Tuesday revised upwards its GDP growth forecast for India to 6.9% for 2022-23 (from 6.5% made in October 2022), saying the economy was showing higher resilience to global shocks. On the other hand, Fitch now expects world GDP to grow by 1.4% in 2023, revised down from 1.7% in September 2022. Nifty could fall some more towards the 18,442-18,535 band in this move in the near term. On up moves, 18,696 could offer resistance.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Weak sentiment prevailed through the session as investors offloaded shares in rate-sensitives such as banking, automobile and realty stocks on the eve of RBI’s credit policy announcement. In the past we have seen investors turning cautious ahead of a key event and booking some profit to avoid getting caught off guard. If the rate hike is above the street expectations, investors may press the panic button, which could accelerate the selling pressure. The currency market too witnessed hectic activity as rupee breached 82 mark, fueling concerns of overseas investors cutting their positions in local equities. Currently, the market is trading near the 10-day SMA (Simple Moving Average) indicating strong possibility of a trend reversal in the near future. For traders, 18,700 would be the key level to watch out, as above the same we could see a fresh uptrend rally till 18,800-18,850. On the flip side, a fresh round of selling pressure is possible only after the dismissal of 18,600, and below the same the index could slip till 18,500-18,480.