Closing Bell: Nifty ends below 17,800, Sensex plunges 634 pts; IT, pharma, FMCG worst hit

Nifty broke its momentum support levels of 17900 and tested the 17700 levels. For the short term, selling pressure can push the index towards 17350-17450 mark. The medium term outlook remains intact as we don’t see any signs of trend reversal.

On the higher side expect 19000-19500 to be conquered going ahead. Value is seen in the energy and NBFC space while other high beta sectors are expected to remain volatile.

Markets remained under pressure for the third successive session and lost nearly a percent. The tone was negative from the beginning, tracking weak global cues which further deteriorated as the day progressed. However, a rebound in the final hour trimmed some losses.
Consequently, Nifty settled around 17,757 levels; down by 1.01%. All the sectors ended in the red wherein IT, FMCG, banking and pharma were the top losers. The broader markets too ended lower in the range of 0.1-0.2%.

Markets are currently facing global headwinds and there’s no relief from the domestic front as well. However, we feel it’s a healthy correction so far and expect Nifty to hold the 17,600 zone. For traders, the major challenge is to tackle the volatility amid the earnings season.

We feel it’s prudent to limit positions and prefer a hedged approach until markets resume the uptrend. Investors, on the other hand, shouldn’t worry much about the recent fall and maintain their focus on accumulating quality stocks on dips.

The Nifty witnessed continued selling pressure for the third consecutive session. As a result, it has swiftly fallen towards its key DMAs as well as near the 20 WMA. These moving averages are placed near 17700-17600.

The 38.2% retracement of the entire Dec – Jan rally is also present near 17610. Thus the Nifty has now reached a key short term support zone of 17700-17600.

The index can form a base over here & attempt a bounce. On the higher side, the level of 18000 will now act as a near term barrier. The hourly moving averages have also come down to around 18000. So going ahead, 17600-18000 is expected to be the near term range for the Nifty.

The benchmark index continued the fall consecutively for the third day in a row and Nifty50 made an intraday low at 17648.45 levels, dragged almost 1% to close at 17779.50 levels while Bank Nifty slipped 0.37% to settle at 37899.20 levels.

Technically, the Nifty index has corrected almost 700 points in the last three sessions as the Bearish Engulfing pattern indicated the further correction on the daily chart. However, in the recent candle the index has tested immediate support at 38.2% RL of its previous rally.

Moreover, the index has failed to sustain below 21 – days SMA that suggests further support around 17640 levels, below that the correction may extend till 17400/17300 levels.

At present, the index has support at 17640/17500 levels while resistance comes at 18000 levels. On the other hand, Bank Nifty has support at 37500 levels while resistance at 38400 levels.

Nifty ended the session on a negative note for the third consecutive session as the selling pressure felt throughout the day. During the entire day Nifty remained below 10EMA which suggests near term weak trend. Going forward, the trend is likely to remain weak as long as the Nifty sustains below 17900.

On the lower end support seen at 17610, below which more downside may come in the market.

Persistent concern over global inflation and likely Fed rate hike acted as the major headwinds for the domestic market to tumble for the third consecutive day.

High volatility due to rising bond yields is pressuring foreign investors to pull out funds from highly valued markets like India. As the recent earnings failed to excite the market, the on-going global volatility drained investor confidence.

: Benchmark indices ended lower on January 20 on the back of continues profit booking, with Nifty closing below 17800.

At close, the Sensex was down 634.20 points or 1.06% at 59,464.62, and the Nifty was down 181.40 points or 1.01% at 17,757. About 1593 shares have advanced, 1606 shares declined, and 64 shares are unchanged.

Bajaj Finserv, Infosys, TCS, Divis Lab and Bajaj Auto were the top Nifty losers, while gainers included Power Grid Corporation, Bharti Airtel, Grasim Industries, JSW Steel and Britannia Industries.

Except power, realty and metal, all other sectoral indices are trading in the red with auto, IT, FMCG and pharma indices down 0.8-1.7 percent. BSE midcap and smallcap indices ended flat.

JM Financial Private Equity has finalized a total investment round of Rs 1,000 mn, along with co-investors, as a part of Series B fund raise in a Bengaluru based agri-digital platform, BigHaat Agro Pvt Ltd, to fund the Company’s current growth plans.

Beyond Next Ventures, one of the earlier investors in BigHaat also participated in the fund raise. Proceeds from the investment will support augmentation of the existing technology infrastructure and accelerate expansion of the company’s operations.

This marks the closing of the ninth investment by JM Financial India Fund II. Set up in 2015, BigHaat functions on a unique direct-to-farmer model and is transforming the agriculture value chain by leveraging science, data and technology.

JM Financial was quoting at Rs 74.70, up Rs 0.05, or 0.07 percent on the BSE.

SMS Pharmaceuticals has received a non-exclusive license through the Medicines Patent Pool (MPP) to manufacture molnupiravir, an investigational antiviral Covid-19 medicine, to increase broad access of treatment in 105 low-and middle income countries (UMIC).

SMS Pharmaceuticals was quoting at Rs 136.50, up Rs 5.40, or 4.12 percent on the BSE.

Strides Pharma Science announced its partnership with Medicines Patent Pool (MPP) to commercialize molnupiravir in the international markets, as per the company release.

Strides Pharma Science was quoting at Rs 421.55, down Rs 0.30, or 0.07 percent on the BSE.

The Indian equity market is showing weakness for the third day in a row on the back of FIIs' selling, rising US bond yields, and concerns of inflation, however this is just a correction that should be taken as a buying opportunity.

If we look at the trend of last three years then the market starts to correct between 15-20th January and then it witnesses post-budget rally. A similar trend is visible for this year as well, however I believe the market may witnesses recovery from here as we are near critical support levels.

Nifty is trading near critical support of 17650 which was the previous breakout level while 17500 is another important support level.
On the upside, 18000-18200 is an immediate resistance area, above this, we can expect a move towards an all-time high.

The texture of Bank Nifty is strong and it may outperform from here and I believe we can expect strong earnings by banking names.

Bajaj Finserv has posted 2.6 percent fall in its Q3 net profit at Rs 1,256 crore against Rs 1,289 crore and revenue was up 10.2% at Rs 17,587 crore versus Rs 15,958 crore, YoY.

Bajaj Finserv was quoting at Rs 17,248.40, down Rs 839.15, or 4.64 percent on the BSE.

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