Closing Bell: Nifty ends around 17,850, Sensex falls 311 pts dragged by oil & gas, bank & metals

Taking Stock | Market extends losses; Sensex falls 311 points, Nifty ends around 17,850

Broader indices outperformed the benchmark indices with BSE midcap and smallcap ending on a flat note.... Read More

The Nifty opened on a flat note and as the day progressed the selling pressure intensified and the Nifty closed in the negative down ~100 points for the day. On the daily charts, the Nifty has come back within the downward sloping channel from which it broke during the last week. On the hourly charts we can observe that the Nifty has closed below the key hourly moving averages which is a sign of weakness in the short term.

Prices are moving along the hourly lower Bollinger band which is expanding indicating that the fall is likely to continue. Thus, considering the above parameters we change our short-term outlook on the Nifty to sideways.

The range of consolidation is likely to be 18,150 – 17,650. In terms of levels, 17,920 – 17,970 shall act as immediate hurdle, while on the downside the 17,650 – 17,600 which convinces with the 61.82% fibonacci retracement level shall act as a crucial support to watch out for form short term perspective.

The Bank Nifty bears continued to attack at the higher levels and the index witnessed selling pressure throughout the day. The trend remains negative and one should keep a sell-on-rise approach as long the index stays below the level of 41,500 where the highest open interest is built up on the call side.

The next support is visible at 40,000 where some amount of put writing is visible.

Markets started the week on a subdued note and lost over half a percent, in continuation of the recent fall. After the initial uptick, the Nifty index gradually drifted lower as the day progressed and settled closer to the day’s low.

The continuous pressure in the banking and financials pack combined with a downtick in the energy majors kept the tone negative. Meanwhile, the broader indices traded mixed and ended flat to marginally lower.

The underperformance of the banking and financial majors is largely weighing on sentiment, in absence of any major event. And, indications are pointing towards more pain in banking however resilience in the IT, auto and select FMCG heavyweights may cap the damage.

Besides, the upcoming monthly expiry of the February month derivatives contract would further add to the choppiness.

Drubbing in banking stocks dragged down the markets today, which languished in the negative territory for major part of the trading session. Factors such as more pain going ahead through further rate hikes, rising inflation, and the recent Adani saga continue to weigh on investors' minds.

Also, Indian stocks are still expensive compared to China, and hence investors are taking this opportunity to curb their holdings. Technically, a bearish candle on daily charts is indicating further weakness from the current levels.

However, the Nifty is trading near the 20-day SMA and Sensex is trading near the important support level of 60,600. If the index succeeds to trade above 17,900, a quick pullback rally is not ruled out. Above which, it could move up to 18,000-18,125. On the flip side, a fresh selloff is possible only after the dismissal of 17,800 and below the same the index could slip till 17,730-17,700.

Stocks are getting beaten ahead of the release of Fed minutes on Wednesday. Maintaining its guard against inflation, the Fed is expected to remain hawkish. As expected, it is unlikely to have a dire effect on the global stock market. However, the consequence of constant high interest rates is causing a slowdown in demand & the earnings outlook, hence the near-term trend will be cautious.

Indian rupee ended higher at 82.73 per dollar against previous close of 82.83.

Domestic airline traffic rose 95.7% YoY, while down 1.6% MoM at 12.5 million
IndiGo market share stood at 54.6% against 54.9% and SpiceJet market share at 7.3% versus 7.6%, MoM
Vistara market share at 8.8% versus 9.2%, while Air India market share unchanged at 9.2%, MoM

Benchmark indices ended lower on February 20 amid selling across sectors barring auto and IT names.

At Close, the Sensex was down 311.03 points or 0.51% at 60,691.54, and the Nifty was down 99.60 points or 0.56% at 17,844.60. About 1370 shares have advanced, 2118 shares declined, and 155 shares are unchanged.

Cipla, Adani Enterprises, Britannia Industries, BPCL and UPL were among top Nifty losers, while gainers were Divis Laboratories, UltraTech Cement, Tech Mahindra, Hindalco Industries and Power Grid Corporation.

Except auto and IT, all other sectoral indices ended in the red.

The BSE midcap and smallcap ended on flat note.

-Overweight rating, target at Rs 1,580 per share
-Fundamentals are tracking well & Q3 surprised
-Raise forecasts sharply
-However, impute a higher stock supply discount
-Valuation discount to historical mean & to peers has widened
-Stock should see a sharp rally post supply-overhang though timing uncertain

Shriram Finance was quoting at Rs 1,235.05, up Rs 1.35, or 0.11 percent on the BSE.