Closing Bell: Nifty ends below 17,400, Sensex falls 773 pts; IT, realty worst hit

The rising US inflation has raised concerns that the Federal Reserve could soon initiate its rate hike decision, which created a lot of uncertainty among the global investors, including India. After 3 days of rise, investors liquidated their holdings as they fear the market could correct going ahead.

The Nifty took support near 17050 but failed to sustain above the 20-day SMA which is broadly negative. Technically, the index is witnessing non directional activity near the 50-day SMA. However, on daily and weekly charts, it is holding higher bottom formation but at the same is consistently facing resistance at 20 day SMA. Hence, the market is likely to maintain non directional activity in the near future.

The immediate support would be 17300-17250 while 17600 and 17700 would act as a crucial hurdle for the bulls. Meanwhile, after a short term correction the Bank Nifty held the level of 20-day SMA. The structure suggests 38200 or 20-day SMA and 38000 would be the sacrosanct support for the index, and above the same uptrend momentum is likely to continue till 39500-40000.

Benchmark Indices snapped three days winning momentum and ended on a negative note. Nifty made low of 17303.0 and closed at 17374.75 levels (-1.31%) and Sensex made low of 57914.10 and closed at 58,152.92 (-1.31%) levels.

All major sectoral indices ended in red with IT & reality down by 2%.

On the technical front 17,250 and 17,450 are immediate support and resistance in Nifty 50 respectively. For Bank Nifty 38,200 and 38,800 are immediate support and resistance respectively

The market had a weak start and selling accentuated throughout the session as after making an intraday high at 17454.75 level index closed the session at 17374.75 level with a loss of 231.10 points. While Bank Nifty closed the session at 38517.25 level with a loss of 493.70 points.

On the technical front, the index has formed a Doji kind of Candlestick on a weekly chart which points out confusion between buyers & sellers. Furthermore, the index is trading below the middle band of Bollinger which suggests downside movement in the counter.

On an Hourly Chart, the index has been trading below 21*50-HMA with the negative crossover which suggests weakness for next session.

Moreover, the daily momentum indicator Stochastic as well MACD is also trading with negative crossover which adds weakness in prices.

At present, the index has support at 17130 levels while resistance comes at 17600 levels. On the other hand, Bank Nifty has support at 38000 levels while resistance at 39000 levels.

Nifty found resistance around 17635 and slipped lower towards the gap on the daily timeframe. On the daily timeframe, a red-bodied candle is visible.

Once again, the index has slipped below the 50 EMA. The trend looks sideways to negative for the near term. On the lower end, support is visible at 17250-17265. On the other hand, Nifty needs to move beyond 17640 to change the current bearish trend.

Aggressive FII selling resulting from negative global cues wreaked havoc in the domestic market today. Globally markets traded in red amid mounting concerns of surging US inflation which fuelled fears of a hawkish rate hike by the central bank.

US inflation surged 7.5% on an annual basis with the consumer price index for all items rising 0.6% in January. On the domestic front, all sectors were deep in red with IT, realty and PSU banks being the most affected.

Benchmark indices snapped three-day gaining momentum and ended lower on February 11 with Nifty below 17,400.

At close, the Sensex was down 773.11 points or 1.31% at 58,152.92, and the Nifty was down 231 points or 1.31% at 17,374.80. About 896 shares have advanced, 2318 shares declined, and 105 shares are unchanged.

Grasim Industries, Tech Mahindra, Infosys, HCL Technologies and UPL were the top Nifty losers, while gainers were IOC, IndusInd Bank, NTPC, Tata Steel and ITC.

All the sectoral indices ended in the red with IT and realty indices down 2 percent each. BSE Midcap and Smallcap indices fell nearly 2 percent each.

Factoring in higher LLP, we cut our earnings forecasts for FY22-23 by 4-9% and expect the RoA/RoE trajectory to remain sub-par at 0.6-0.9%/7-11% over FY22-24. Given sub-par asset quality, liability profile and return ratios (RoA<1%), we retain Sell with a revised
target price of Rs 70 (vs. Rs 75), valuing the bank at 0.6x Dec’23E ABV.

The shorter MD tenure (till Apr’22) also adds to concerns amid the recent intervention in RBL by the RBI. Instead, we prefer Federal, KVB, CUBK and Equitas in the small/mid-cap private banking space.

Key risks: better-than-expected delivery on growth/liability profile and faster improvement in asset quality.

We expect significant improvement in performance in future driven by strong volume growth, extensive geographical coverage and experience from the company’s highly qualified senior management personnel.

Further, the Government has proposed to add 100 cities to the City Gas Distribution network as per the Union Budget 2022.

With promising outlook, we reiterate our buy rating on the stock with a rolled forward target price of Rs 474 based on SOTP methodology.

Market falls over 1.5% on fears of aggressive Fed hike

Benchmark indices snapped their three-day winning streak and were trading over 1.5% lower on Friday after U.S. consumer prices data came in hotter than expected.... Read More

Power Finance Corporation has posted 2 percent jump in its standalone net profit at Rs 2,380 crore versus Rs 2,333 crore and revenue was down 4.5% at Rs 9,626 crore versus Rs 1,884 crore, YoY.

Gross NPA was at 6.06% versus 5.67% and net NPA at 2% versus 1.92%, QoQ.

Power Finance Corporation was quoting at Rs 120.85, down Rs 2.15, or 1.75 percent.

Ashoka Buildcon, Atul Auto, Capri Global Capital, Dilip Buildcon, DB Realty, Galaxy Surfactants, Hinduja Global Solutions, Hindustan Copper, ISGEC Heavy Engineering, Jain Irrigation Systems, Jaiprakash Associates, KRBL, Max Healthcare Institute, Mcnally Bharat Engineering, Muthoot Finance, Nureca, PNC Infratech, Ramco Systems, Sadbhav Infrastructure Project, Shalimar Paints, Thyrocare Technologies, and Viceroy Hotels will release quarterly earnings on February 12.