Closing Bell: Nifty below 17,500, Sensex falls 141 pts; auto, metal, PSU banks top drag

Taking Stock | Nifty slips below 17,500, Sensex settles 141 points lower; metals crack

The BSE midcap and smallcap indices ended with minor losses.... Read More

The Nifty has fallen back into the falling channel, heightening the chances of further downsides. The 50DMA and 14DMA are in a bearish crossover. Also, the current value is sitting well below the critical near-term moving averages, with the momentum oscillator RSI (14) slipping below the reading of 50.

The current set-up is likely to keep the Nifty under pressure, with a potential downside towards 17,150–17,200 over the short term. On the higher end, crucial resistance is placed at 17,800.

With the inflationary pressure sky rocketing and a deep dive towards US recession this year onwards, a fed rate hike of 25 basis points is highly possible. Since the labor market is also tightening, and beyond the 2% target, along with a restrictive stance of monetary policy, this rate hike might be of a hawkish tone to be in line with their quantitative tightening strategy

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The downward spiral continued amid a sharp bout of intra-day volatility as uncertainty surrounding the weak global economic scenario coupled with the probability of the US Fed maintaining a hawkish stance going ahead weighed on the sentiment.

The markets may continue to witness intermittent bearish spells as investors are likely to cut their long positions owing to multiple negative factors.

Technically, the Nifty has formed a long bearish candle on weekly charts which indicate further weakness from the current levels. However, with the market in an oversold territory, we could see a quick pullback rally if the index trades above 17,500. Above which, the pullback formation is likely to continue till 17,600-17,750.

On the flip side, as long as the index is trading below 17,500, the weak sentiment will continue. Below which the index could retest the level of the 200-day SMA or 17,400.

The Nifty opened on a positive note however it could not sustain at higher levels and as the day progressed it continued to drift lower to close the day on a negative note for the sixth consecutive day.
On the way down the Nifty is trading around the crucial support trendline derived at by joining the previous couple of swing lows. On the hourly charts a positive divergence is developing and the hourly momentum indicator also has a positive crossover which indicates that a bounce is possible.

The bounce is likely to be temporary in nature and is unlikely to result into a trend reversal. The daily momentum indicator has a negative crossover which is a sell signal. Overall, the downtrend is still intact and any bounce should be used as an opportunity to create fresh short positions. We expect Nifty to target level of 17,350 from short term perspective.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.

The domestic market is broadly demonstrating a lack of confidence, registering its sixth consecutive day of losses despite global markets turning green. Continued selling in the domestic market by FIIs is acting as an overhang in sustaining the early gains. Crude oil prices rallied as the prospect of lower Russian exports outweighed rising US inventory.

Indian rupee ended flat at 82.75 per dollar against previous close of 82.74.

: Benchmark indices ended lower in the volatile session on February 24 with Nifty below 17,500.

At Close, the Sensex was down 141.87 points or 0.24% at 59,463.93, and the Nifty was down 45.50 points or 0.26% at 17,465.80. About 1483 shares have advanced, 1877 shares declined, and 157 shares are unchanged.

Adani Enterprises, Hindalco Industries, M&M, JSW Steel and Tata Steel were among the biggest losers on the Nifty, while gainers included Divis Laboratories, Adani Ports, Asian Paints, Coal India and Dr Reddy's Laboratories.

Among sectors, metal index down 3 percent and auto index slipped 1 percent.

BSE midcap and the smallcap ended with marginal loss.

Indian rupee snaps four weekly losses and outperforms Asian currencies amid lower crude oil prices, the central bank’s intervention and foreign fund inflows. In the week gone, foreign institutions bought worth $173 million equities.

In the near term, the spot USDINR has been facing resistance at 83 where the central bank is intervening while at 82.50 importers are buying.

-Buy rating, target at Rs 76 per share
-Company is especially doubling down on loyalty program for growth
-Loyalty program is a medium-term value engine if churn falls & frequency rises
-Estimate 50 bps QoQ negative impact on contribution margin ex-ante

Zomato was quoting at Rs 54.40, down Rs 0.55, or 1 percent.

-Neutral rating, target at Rs 950 per share
-Winlevi average realiations very low but can improve; volume trajectory is bigger concern
-Winlevi constituted <2% of acne market's volume share
-High generalisation could be an impediment for Winlevi
-Winlevi's ramp-up is key for near-term growth in US specialty

Sun Pharmaceutical Industries was quoting at Rs 970.35, down Rs 1.95, or 0.20 percent on the BSE.