Indian equity benchmarks extended their fall by late afternoon on January 23, as sharp selling in frontline banks, fast moving consumer goods (FMCG) and metal put pressure on the Nifty and the Sensex. Subdued cues from Asian markets also weighed on sentiment.
Index heavyweight such as HDFC Bank, Reliance Industries and Hindustan Unilever which slipped 2-4 percent put pressure on the benchmarks.
Analysts, however, were not reading much into the decline as the the Nifty was expected to witness consolidation after recent swings.
At close, the Sensex was down 1,053.10 points or 1.47 percent at 70,370.55, and the Nifty was down 333.00 points or 1.54 percent at 21,238.80. The market breadth tilted in favour of laggards as more than two stocks fell for each one that rose.
The broader market also traded weak, with small and midcap indices struggling with losses.
Sectoral trends
Most frontline banking stocks faced selling as investors rushed to book profits after recent gains. Frontline stocks such as HDFC Bank and SBI were down over 3 percent, which dragged the Nifty Bank index over 2 percent lower.
Among other sectors, energy, metals, PSU bank, FMCG and infra also sunk into losses. On the other hand, stellar Q3 results by industry major Cipla gave a boost to other pharma names as well, lifting the Nifty pharma index around 2 percent.
Fundamental view
"The week is a holiday-shortened one and we expect volatility to remain high, due to the prevailing earnings season and the scheduled monthly expiry of January month derivatives contracts. On the global front, indications are mixed however strength in the US markets would continue to offer support," said Ajit Mishra, SVP-Technical Research, Religare Broking.
Technical view
"The Nifty can find support at 21,550 followed by 21,500 and 21,450. On the higher side, 21,700 can be an immediate resistance followed by 21,750 and 21,800," said Deven Mehata, research analyst, Choice Broking.
Bank Nifty chart indicate it may get support at 45,800 followed by 45,650 and 45,500. If the index advances, 46,500 would be the initial key resistance followed by 46,700 and 46,800, he added.
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Key Nifty gainers
Bharti Airtel, Cipla, Sun Pharma, Hero MotoCorp, Power Grid
Key Nifty losers
HDFC, Britannia, ONGC, Coal India, BPCL
Key Sensex gainers
Sun Pharma, Bharti Airtel, Power Grid
Key Sensex losers
HDFC Bank, Asian Paints, HUL
Stock moves
Cipla: The share soared 7 percent, a day after the company reported a strong performance in Q3 on all key parameters of profit, revenue and profitability. The company's net profit for the quarter grew 32.7 percent on year to Rs 1,049 crore despite an exceptional loss of Rs 194.8 crore. The bottomline growth was also aided by a 14.2 percent on year increase in revenue to Rs 6,544 crore in the October-December period.
Zee Entertainment Enterprises: The stock tanked 30 percent, a day after Sony Pictures scrapped its $10-billion merger with the Indian media giant. Brokerages anticipate a sharp slump in Zee's valuation following the deal falling apart, prompting a slew of downgrades.
Persistent Systems: The share gained nearly 4 percent after reporting healthy Q3 earnings. The IT services firm posted a 20.2 percent increase in net profit at Rs 286.1 crore on-year, driven by a strong order book. Revenue was up 15 percent at Rs 2,498.2 crore.
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