Closing Bell: Sensex, Nifty end higher in choppy trade; capital goods, power stocks drag

Markets ended marginally up in a highly volatile trading session, taking a breather after the recent fall. The benchmark inched further lower after the flat start however recovery in the select index majors helped the index to recoup losses. Finally, the Nifty index closed around 17,266 levels.

Amongst the sectors, a mixed trend was witnessed wherein realty, capital goods and industrials ended with losses while metal and PSU banking index posted modest gains. The broader markets remained under pressure as both midcap and small cap ended lower by 0.8% and 1.8% respectively.

We’ve been seeing a roller coaster ride since the Union Budget and the scheduled MPC meet is likely to keep the volatility high. Besides, the global cues are also not portraying any favourable picture, so participants should continue with the cautious stance and limit leveraged positions.

The Nifty opened on a positive note only to attract a fresh round of selling near 17300. Thereon the index nosedived towards the 78.6% retracement of the recent rise i.e. 17040. The key Fibonacci level induced the bulls into the action. Overall, structure shows that the index is forming a triangular pattern & received support as it approached near the lower end of the pattern, which is near 17000.

Over here, the Nifty is expected to form a base for itself & start recovering. On the higher side, 17300-17400 is a near term hurdle zone beyond which larger upside to 17800 can be expected.

Indian equities were highly volatile today, swaying between gains and losses while managing to close on a positive note. Selling pressure from FIIs was countered by bargain hunting by domestic investors.

European shares advanced over ECB President’s comments stating that there are lower chances of a measurable tightening of monetary policy, which helped in comforting global investors.

Bulls managed to hold the psychological 17000 level after a fight with the bears. On the daily chart, Nifty has formed a dragonfly Doji pattern suggesting buying at the lower levels.

The recovery in the market may continue as long as the index holds above 17000. On the higher end, immediate resistance is visible at 17330. Sustained trades above 17330 may induce further rally in the market.

While the Nifty broke yesterday's low, it bounced sharply to close above 17100. If we break 17100 on a closing basis, the markets can slide further to 16800-16850.

On the upside there is a resistance at 17600 and we would need to close above that for the index to turn bullish.

As policy makers face one of the fastest pace of price increases in the developed markets, global stock markets are facing a challenge in pricing the likely actions by central bankers.

Back home, the Nifty opened extremely weak and drifted closer to 17K levels on geo-political worries and soaring oil prices with passive emerging market funds booking profits.

As bond yields price in ahead of the RBI policy, supply of paper ahead of a mega primary market offering kept investors circumspect though indices managed to recover substantial lost ground to end in the Green in afternoon trade.

: Benchmark indices snapped three-day losing streak and ended higher in the highly volatile session ahead of RBI policy outcome later this week.

At close, the Sensex was up 187.39 points or 0.33% at 57,808.58, and the Nifty was up 53.20 points or 0.31% at 17,266.80.
About 1062 shares have advanced, 2180 shares declined, and 83 shares are unchanged.

Tata Steel, Bajaj Finance, Divis Labs, Reliance Industries and Bajaj Finserv were the top Nifty gainers, while losers were ONGC, Power Grid Corporation, IOC, SBI Life Insurance and Tata Consumer Products.

Except auto, metal, pharma, PSU bank all other sectoral indices ended in the red. BSE smallcap and Midcap indices shed 0.45-1.4 percent.

RBI may keep repo rate unchanged at monetary policy meet, suggests poll

A Reuters poll of economists forecast that the central bank will raise the reverse repo rate - the rate at which it borrows from banks - to 3.55 percent from 3.35 percent.

Bank of Baroda remains well-capitalized among large PSBs, with CET 1 at 11.3% post QIP. Factoring in better growth/NIMs and lower LLP, we upgrade FY22E/23E/24E EPS by 28%/10%/8%.

RoE should gradually improve to 9-12% over FY22-24E from a low of 1% in FY21. Thus, we retain Buy/OW in EAP with a revised target of Rs 145 (vs. Rs 130) based on 0.9x Dec’23E ABV (vs. 0.8x earlier).

Key risks: higher NPA formation, mainly in the corporate/SME book; and slower-than-expected growth trajectory

Why is the mood swinging so much on markets? Here's a look at the factors driving volatility

In the morning trade both Sensex and Nifty fell around 1% before rebounding. Now the indices have declined around 0.4%.

The public issue of Vedant Fashions continued to see tepid response from investors on the final day of bidding on Tuesday with 1.73 times being subscribed so far. It garnered bids for 4.41 crore equity shares against an offer size of 2.54 crore equity shares.

Qualified institutional investors have put in bids 5.33 times the reserved portion. Their allotted quota has to get subscribed at least 90 percent to sail through the issue.

A part set aside for retail investors and non-institutional investors were subscribed 36 percent and 15 percent, respectively.