BSE Sensex and Nifty 50 fell nearly one per cent on Monday, on the back of weak macroeconomic data, spike in COVID cases, rise in crude oil prices and bond yields.
During intraday, Sensex hit a low of 49,799.07 while Nifty touched 14,745.85
BSE Sensex and Nifty 50 fell nearly one per cent on Monday, on the back of weak macroeconomic data, spike in COVID cases, rise in crude oil prices and bond yields. BSE Sensex ended 398 points or 0.78 per cent lower at 50,395.08, while the broader Nifty 50 index fell 101.45 points or 0.67 per cent to end at 14,929.50. During intraday, Sensex hit a low of 49,799.07 while Nifty touched 14,745.85. Market breadth favored bears ar 1,832 scrips declined while 1,223 shares advanced. A total of 208 stocks remained unchanged. The broader markets outperformed the equity benchmarks. The S&P BSE MidCap index closed at 20,429 , down 0.72 per cent or 148 points while the S&P BSE SmallCap index ended at 21,096, down 0.53 per cent or 113,28 points. Meanwhile, India VIX, volatility index fell 2.21 per cent to end at 21.23.
Index opened a day with mild gains but failed to sustain on the positive side & seen sharp slide and closed a day on a negative note at 14929 with loss of nearly one percent. The index showed some pullback after touching its rising trend line on the daily chart, going forward 14750 will be immediate & strong support if managed to hold then some more pullback possible towards immediate hurdle zone of 15k mark followed by 15100 zone.
Weakness in national macro data and rise in global bond yield ahead of the crucial FED monetary policy meeting dented domestic momentum. Both the inflations of retail and wholesale, inclined higher than estimated while industrial production de-grew in January 2021. However, optimism in European & other Asian markets helped to recover from the sharp initial losses. We can expect this volatility to stabilize based on the global outlook post a confirmation from FED to maintain an accommodative policy.
Binod Modi, Head Strategy at Reliance Securities
Domestic equities witnessed sharp sell-off for the second consecutive trading day as mounting concerns about resurgence of Covid-19 cases in various part of the country and rising bond yields made investors jittery. Further, unexpected contraction in IIP data for Jan’21 and sharp spike in CPI print also weighed on sentiments. A sharp increase in US treasury yields and recent spike in fresh Covid-19 cases in various parts of the country have clearly dented investors’ sentiments. Notably, outcome of Fed policy meeting will be crucial for domestic markets in coming days.
While the spread of 10-Year USA treasury yields and India’s GSec Yield at 460bps and dollar index below 92 still offer comfort, any sharp deterioration in these prints hereon may pose a risk to the domestic market. However, given the sharp rise in the government’s capital expenditures for FY22E along and various reforms to stimulate investment and consumption activities, the underlying strength of domestic equities remains intact, and India is expected to witness a sharp economic recovery in FY22 and thereafter.
Ashis Biswas, Head of Technical Research at CapitalVia Global Research Limited
The market witnessed some swift recovery from its short-term support around the Nifty50 Index level of 14800 in the market. the expected level should range between 14950 and 15300, and it’s going to crucial for the short-term market scenario to sustain above the 14800 to keep the long-term uptrend intact. While it is subject to further price action evolution, it is prudent to wait for a decisive breakout above 15000 and technical factors to improve before going long in the market. The traders are advised to refrain from building a new buying position until further improvement is seen and a breakout above 15000. volatility is observed to expand in today’s trading session.