Closing Bell: Nifty ends around 18,100, Sensex falls 293 points; PSU banks outperform

Taking Stock | Sensex, Nifty end last session of 2022 in the red; PSBs, metal stocks shine

During the week, both BSE Sensex and Nifty gained 1.6 percent each.... Read More

We expect both the real growth as well as the CPI and WPI inflation prints to moderate in the year ahead, leading to an easing in the nominal GDP expansion as well as tax revenue growth.

A lower subsidy burden is likely to aid in a modest fiscal consolidation in the upcoming Budget, even if the capital outlay is enhanced.

The benchmark Nifty recovered smartly during the week, pairing more than 50% of the previous week's loss. The index has formed a bullish harami pattern on the weekly chart, suggesting a bullish reversal. Besides, the index has closed above its 50-week exponential moving average.

The momentum indicator RSI (14) on the weekly chart is in a bearish crossover. The 50 EMA and 200 DMA are in the bullish crossover. The trend for the short term is likely to remain bullish as long as it remains above 17,800 on a closing basis.

On the higher end, resistance is visible at 18,350. A decisive move above 18,350 may induce a further rally towards 18,600/19,000. On the other hand, a decisive fall below 17,800 may weaken the trend.

2022 was a year of polarisation – be it geographically for India standing tall, or equities. 2023 would be a year to watch of for 4 Cs – CPI globally – are we seeing a trend reversal or just a lull before the storm, China - will the dominance return and how soon , and Currency - will USD continue its to display its indomitable spirit.

An overlay of these factors, coupled with geopolitical events could well mean possibility of convergence (4th C) in returns in equities and fixed income as an asset class. Central banks’ actions to hike rates may see a plateau in 2023, but maybe too soon to pivot towards rate cuts.

The Nifty registered a new all-time high on December 01 2022 & entered short term correction phase thereon. The index corrected for 3 consecutive weeks post which it witnessed some relief in the last week of December 2022 as it received support near the 20 WMA. Thus, the Nifty has posted a positive weekly close whereas for the month of December the index has formed a bearish outside bar & an Engulfing Bear candle on the monthly chart.

This shows that the index can remain under pressure in the short term. The daily chart shows that a rising trendline is acting as a resistance along with the key DMAs. Thus, the index can witness a short term consolidation in the range of 17,800-18,400.

Once the short term consolidation phase is over then the index will be set to resume its larger up trend & can head towards the all-time high of 18,887 in the next couple of months.

On the last day of a tumultuous year, domestic indices shed their early gains as negative signals from global peers pushed indices lower. Investors remained concerned over the economic outlook for the new-year, underpinned by growing fears of recession.

The ongoing volatility is expected to be sustained in the near-term because of high interest rates and a slowing economy.

We believe that value buying is the theme of 2023. Fair valuation, steady earnings, and a robust demand scenario will be the cutting parameters.

Indian benchmarks wavered between green and red territory in morning session as investors took their position around the neutral lines on the back of mixed global cues. However, fag-end selling pulled down the markets to close in red.

On the global front, Asian markets are trading mostly in green despite lingering inflation concerns and soaring COVID-19 cases in China. European markets were trading lower with investors remaining wary as a brutal year marred by Russia’s war in Ukraine, soaring inflation, and the associated tightening monetary policy comes to an end.

On the technical front, the key resistance level for Nifty50 is 18,300 and on the downside 17,900 can act as strong support. Key resistance and support levels for Bank Nifty are 43,500 and 42,500 respectively.

Nifty after a flat start accelerated the downfall in the last half hour and ended in the negative. At close Nifty closed 0.47% or 85.7 points lower at 18105.3. Volumes on the NSE continued to be on the lower side.

Broad market indices outperformed ending in the positive as the A/D ratio was up at 1.8:1.

World stocks were mixed (Europe down and Asia mostly up) on the last trading day of the year as markets digested U.S. data and the dismantling of China's zero-COVID policy.

India’s poor CAD number for fiscal second quarter weighed on the minds of participants.

Nifty formed a bearish Dark cloud cover pattern on daily charts. However on weekly charts, Nifty closed in the positive (higher by 1.68%) after a three week fall. 17774 now becomes an important support level to track. On upmoves, 18255-18473 band remains a crucial resistance. Over the calendar year 2022, Nifty gained 4.3%, while for the month of December, it closed 3.5% in the negative.

The Bank Nifty index witnessed selling pressure at higher levels and failed to surpass the level of 43,500 on a closing basis.

The index undertone remains bullish and one should keep a buy-on-dip approach with immediate support visible at the 42,500 level.

The momentum indicators are in the strong buy zone which confirms the strength of the index.

Indian rupee closed higher at 82.72 per dollar against previous close of 82.80.

benchmark indices ended on negative note amid volatility on December 30, the last trading session of year 2022, with Nifty around 18,100.

At Close, the Sensex was down 293.14 points or 0.48% at 60,840.74, and the Nifty was down 85.70 points or 0.47% at 18,105.30. About 2139 shares have advanced, 1238 shares declined, and 140 shares are unchanged.

SBI Life Insurance, Bharti Airtel, Eicher Motors, ICICI Bank and Grasim Industries were among the biggest Nifty losers. Top gainers included Bajaj Finserv, Titan Company, ONGC, Coal India and Bajaj Auto.

Among sectors, metal, realty and PSU Bank indices up 0.5-1 percent, while power, bank and FMCG indices down 0.5 percent each.

The BSE midcap index added 0.37 percent and smallcap index rose 0.76 percent.

Indian Rupee appreciated by 0.10% on Friday on softness in US Dollar and risk-on sentiments in global markets. However, surge in crude oil prices and sustained selling by foreign investors put downside pressure on Rupee. FIIs have remained in the past 5 consecutive sessions. US Dollar declined on rise in risk appetite in global markets.

We expect Rupee to trade with a slight negative bias on expectations of recovery in US Dollar and recovery in crude oil prices. Concerns over a surge in COVID-19 cases may also put downside pressure on Rupee. Traders may remain cautious ahead of India’s fiscal deficit and US Chicago PMI. USDINR spot price is expected to trade in a range of Rs 82.30 to Rs 83.30.

Rupee continued to trade in a narrow range and volatility remains low ahead of new year holidays. Yesterday, dollar rose in the overnight session even after pending home sales number from the US came in lower.

Euro and pound both are trading sideways but are facing some exhaustion at higher levels.

We expect the USDINR(Spot) to trade sideways and quote in the range of 82.40 and 83.05.