CLOSING BELL: Sensex, Nifty end flat, wipe out all gains in sharp sell-off dragged by bank, auto stocks

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Domestic market made a strong head start today and counterbalance some of the bearishness generated by the Federal Reserve's hawkish commentary. Nifty opened on a firm note in line with its Asian Peers. However profit booking emerged at higher levels, wiping out more than 270 points from day’s highs level. It closed flat with minor loss of 8 points at 17,102 levels. Action was seen in Broader market which outperformed with gains of ~1%. Among the sectors, IT & Parma were top gainers up more than 1% each, followed by media, metals, realty, FMCG, oil & gas while banking, auto and financial services were laggards.

Global markets were mixed and regained some of the losses of past few days on back of impressive corporate earnings and positive data from European region. However, investors still remain cautious over the recent hawkish policy by Federal Reserve as well as Russia’s intentions for Ukraine. Oil prices are on the course for its sixth weekly gains, led by concerns of oversupply levels ahead of the upcoming meeting of OPEC + countries.

Equity markets have been witnessing increase volatility over the last few days. While the US Fed outcome is now behind, several other factors including ongoing result season, Union Budget on February 1 and Russia-Ukraine conflicts would keep the market volatility high in coming week as well. Expectations are running high from the government to present a progressive budget which can revive economic growth. However, given the various state election, risk of a populist budget cannot be ruled out completely. Capital Goods, Infra, housing, Real Estate, PSU Banks, etc are some of the sectors that would remain in focus ahead of the Budget.

Net profit was up 1.6% at Rs 317 crore against Rs 312 crore (YoY). Revenue rose 13.4% at Rs 2,407 crore against Rs 2,122 crore (YoY). EBITDA was up 4.4% at Rs 431 crore against Rs 413 crore (YoY).

Nifty closed negative for the week and is trading around its 100 day EMA on the daily chart. The recovery in the last trading session indicates that the index seems to have found a cushion at the previously established demand zone of 16,850. The BankNifty index is also bouncing from the short-term averages on the daily chart. These pieces of evidence are hinting at the continuation of the major uptrend. We suggest traders maintain a bullish bias as long as the Nifty does not fall below 16,850. However, a break below the same can trigger a fall up to 16,000 levels. The immediate resistance for the index is now placed at 17,650.

Net profit went down 16.7% at Rs 2,054.74 crore against Rs 2,466.7 crore (YoY). Revenue was up 11.1% at Rs 39,562.92 crore against Rs 35,596.42 crore (YoY).EBITDA was up 5.9% at Rs 4,530.2 crore against Rs 4,279.8 crore (YoY). EBITDA margin at 11.45% against 12% (YoY).

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The market , all through the week, witnessed selling across market cap and sectors, and obviously displayed signs of being in a bear grip, as it traded lower, breaking certain key technical levels. The normalization of liquidity, and the likely hike in key policy rate in the US accelerated the fall in the US markets and Europe, and the same was reflected in emerging markets too. The domestic market has seen a huge selling by the overseas investors, and this aspect has been the main factor dampening the sentiments to a large extent.

The coming week will be influenced to some extent by the expectations from the Union Budget which will be presented on February 1,2022. The outlay on infrastructure, the expansion of the PLI Scheme, the fiscal consolidation path post the pandemic, the specific measures to boost consumption, are some of the things which the market is eagerly waiting for. An aggressive Budget alongwith reasonably good earnings performance could counter the pace of the sell off in the markets to a significant extent.

Net profit at Rs 302 crore against Rs 479 crore (YoY). NII grew 29.6% at Rs 820.5 crore against Rs 633.1 crore (YoY). Gross NPA at 2.60% against 3.16% (QoQ). Net NPA at 1.29% against 1.65% (QoQ).

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Markets ended almost unchanged in a volatile trading session citing mixed indications. Initially, the benchmark was trading firm however profit taking in the latter half pare all the gains. Meanwhile, the broader markets witnessed healthy buying interest and both midcap and smallcap ended higher by over a percent each. A mixed trend was witnessed on the sectoral front wherein auto and banking ended with losses while IT, telecom, oil & gas closed in the green.

All eyes are on the Union Budget now which is scheduled next week on February 1. We expect a growth-friendly budget but also expect the government to lay out a path for fiscal consolidation. Besides, earnings and global cues would remain on participants’ radar. We reiterate our cautious view and suggest continuing with hedged positions.

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Nifty opened positive and headed towards 17373 levels in the first half but witnessed pressure in the second half of the day and wiped out all its intraday gains. It formed a Bearish candle on daily scale with long upper shadow even after negating its lower highs formation of the last six sessions. It formed a Bearish candle on daily and weekly scale and has been forming lower highs - lower lows from the last two weeks. Now it has to hold above 17000 zones, to start the next leg of bounce towards 17350 and 17500 zones whereas support exists at 16850 zones.

Bank Nifty opened positive and even after a bounce towards 38400 levels, it fell below 37600 levels. It closed near its lowest part of the day with losses of around 300 points. It formed a Bearish candle on daily and a Doji candle on weekly scale while has been forming higher highs from the last three session. Now it has to hold above 37500 zones for an up move towards 38000 and 38250 zones whereas support can be seen at 37250 and 37000 levels.

After a gap-up opening, Nifty made an intraday high at 17373.50 level but later in the second half of the session profit booking has been seen from a higher level as index wiped out early gains and closed with a moderate loss of 8.20 points at 17101.95 levels. Bank Nifty closed the session at 37689.40 level with a loss of 292.70 points.

On the technical front, the index has confirmed the bearish engulfing candlestick pattern on the weekly chart but it has taken support from 78.6% RL of its previous up rally which suggests sustained above the same can show bounce back movement in the counter. On a four hourly chart, the index has taken resistance from 89-FourHourly Moving Average as well as the index has formed a bearish candlestick pattern which points out the weakness in the counter. Moreover, the momentum indicator Stochastic & MACD is also trading with negative crossover on a daily time-frame which adds bearishness in prices. At present, the Index has support at 16830 levels while resistance comes at 17450 levels, crossing either side can suggest further direction. On the other hand, Bank nifty has support at 37000 levels while resistance is at 38500 levels.

: Nifty remained volatile during the day as it found resistance around 17400 before falling towards 17050. Going forward the volatility is likely to continue; on the higher end, 17400 may remain as crucial resistance. On the lower end, 17050-17000 may act as support for the falling Nifty, below which the index may drift down towards recent swing low of 16836.

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After the decent opening post yesterday’s weak closing, domestic bourses again staged a quick sell-off, tracking weak European trend. Policy tightening by the US Fed and rising geopolitical tensions in Ukraine coloured global sentiments. The broad market ended mixed considering IT, realty and mid & smallcaps rebounded after continuous heavy-selling this week.