Sensex, Nifty volatile; 5 factors that are weighing on the market

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Here are 5 key reasons that are keeping the market down:

1 The new COVID-19 wave

India on April 15 crossed another grim milestone when it reported more than 2 lakh COVID-19 cases. The country's case tally is now above 1.40 crore, with 2,00,739 infections reported in the last 24 hours, the health ministry's  April 15 update says. This is the fifth day in a row that the daily case count has stayed above the 1.5-lakh mark.

Investors are worried that the economic fallout of the new wave will be much bigger than anticipated and derail the nascent economic recovery.

2 States bring back restrictions

Surging cases of COVID-19 have forced many states to impose fresh curbs on public activities.

The Maharashtra government announced a 15-day statewide curfew from April 14 to check sprialling infections in the state. As per a PTI report, the industry has said strict restrictions will help slow the transmission of coronavirus but will have a deep impact on the state's economy.

"The massive restriction of economic activity in an economically significant state of Maharashtra is bound to have its impact on growth and earnings. The market is driven by the hope that in this race between the pandemic and vaccination, the latter will ultimately win but what price we will have to pay for this is clouded in profound uncertainty," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

3 Infosys' Q4 earnings disappoint 

Infosys was among the top drags on the Sensex after the IT major reported softer March quarter earnings.

The country's second-largest IT services company reported a 2.3 percent sequential decline in consolidated profit at Rs 5,076 crore for the quarter ended March 2021, hit by weak margin performance but supported by revenue growth.

Consolidated revenue from operations grew by 1.5 percent sequentially to Rs 26,311 crore, a shade below CNBC-TV18 poll estimates of Rs 26,620 crore.

4 Rupee's volatility

The rupee hit a fresh 9-month low level in intraday trade today. However, the currency ended at day's high at 74.92 per dollar.

The domestic currency opened 14 paise lower at 75.19 per dollar against a close of 75.05 on April 13.

Depreciation in the rupee continued but writing positions are stuck in 75 strike Call, which is likely to get triggered, while a further move towards 75.60 is expected. However, post the GSAP buying, the rupee should cool off, said ICICI Direct.

5. Technical factor

Nifty formed a bullish hammer sort of candle with long lower shadow indicating declines were being bought.

Chandan Taparia, Vice President and Derivatives Analyst at Motilal Oswal Financial Services is of the view that Nifty has to decisively hold above 14,500 for an up move towards 14,700 and 14,850 while on the downside, support exists at 14,350 and 14,250.

As per Rohit Singre, Senior Technical Analyst at LKP Securities, Nifty has formed a good base near 14,460-14,350 zone.

"If it manages to sustain the above-said levels we may see northward move towards 14,700-14,800 which is an immediate and strong hurdle on the higher side. The overall range for Nifty is coming in between 14,250 on the downside and 15,000 on the higher side," he said.

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