Closing Bell: Nifty below 17,000, Sensex falls 398 pts; all sectors in the red

Taking Stock | Sensex slips 398 points, Nifty below 17,000; PSU bank, metal, realty worst hit

Bajaj Finserv, Bajaj Finance, Adani Enterprises, Tata Steel and Hindalco Industries were among the biggest Nifty losers. Cipla, Kotak Mahindra Bank, Dr Reddy's Laboratories, Infosys and Apollo Hospitals gained the most... Read More

In the last trading day of the week, market witnessed a pretty volatile session and ended the session with deep cuts. After a debacle yesterday, the mood of the investors was cautious, as the Asian markets made a mixed opening. Weak opening in European markets too put pressure on domestic bourses.

Volatility persisted whole day, after a weak opening under the influence of weak Asian cues the market weakened continuously with no clear direction. Though the US market gave a surprise on Thursday by ending higher as U.S. Treasury Secretary Janet Yellen's reassurances that measures will be taken to keep Americans' deposits safe and fresh concerns of a US banking crisis, the Asian market didn’t follow the cue and plunged lower.

Insurance and AMC related stocks were in focus as govt amends debt funds having not more than 35% invested in equity shares would be taxed at the income tax slab level and treated as short term capital gain. Bank fixed deposits are also taxed similarly.

Also, IT sector trimmed most of its gains as Accenture expects Q3 revenue to be around $16.7 billion, which is less than expected. Also, Accenture says that it’s planning to layoff around 19000 employes globally.

Finally, the S&P CNX Nifty lost 131.85 points or 0.77% to settle at 16,945.05 and the 30-share BSE Sensex was down by 398.18 points or 0.69% to close at 57,527.10.

Nifty continued to fall for the second consecutive session on March 24 pulled down by weak global cues. At close, Nifty was down 0.77% or 131.9 points at 16945.1. Broad market indices fell more than the Nifty even as the advance decline ratio fell to 0.32:1.

Global markets were mostly lower on Friday with traders remaining cautious as lingering concerns about the recent turmoil in the banking sector continue to hang over the markets amidst fears of economic slowdown.

Nifty has made a short term top at 17,207. It could go towards 16,748 over the next few days. Over the week, it fell 0.91%, down for the third week. 17,324 could be the resistance for the next few days.

Markets inched further lower and lost over half a percent, in absence of any favorable cues. The first half was dull however pressure in the index majors changed the tone and pushed the Nifty index below the 17,000 mark. The fall was widespread wherein metal, realty and energy majors felt the maximum heat. Meanwhile, the broader indices underperformed and shed in the range of 1%-2%.

The recent fall has faded hopes of sustained recovery and we might again end up seeing range bound moves in the index. Needless to say, the major support is intact at 16,800 in the Nifty. We thus reiterate our view to limit positions and maintain positions on both sides.

The Nifty witnessed an extremely volatile day of trade today. It was consolidating in a narrow range during the first half of the session. However, as the day progressed and especially during the last couple hours of the trading session, the Nifty witnessed intense selling pressure which dragged the Nifty lower to close with a cut of 132 points.

On the hurly charts we can observe that the Nifty is trading in the zone of 16910 – 16970 where the crucial Fibonacci retracement levels of the previous rise from 16828 – 17207 are placed. This zone shall be the make or break support zone and if the Nifty fails hold on to this support, it is likely that the Nifty have started the next leg of the fall.

The daily momentum indicator has a positive crossover which is a buy signal and is also supporting our view that the pullback rally is not complete. Thus considering the above, we shall continue to maintain our positive outlook on the Nifty. On the upside the initial hurdle is placed at 17180 – 17210. Beyond this it has the potential to 17315 – 17430.

The Finance bill 2023 with 64 official amendments was passed in Lok Sabha that includes amendments that raise the Securities and Transaction Tax (STT) on the sale of options to ₹2,100 on a turnover of ₹1 crore, up from the earlier applicable levy of ₹1,700.

However, the move may not have direct impact on retail traders, for scalpers Arbitrageurs and HFT (High Frequency Trading) firms transaction expense goes up by 25% which directly impacts their margins and bottom lines

Also, more than 90% volume in Indian Markets originate from Scalpers, Arbitrage houses and HFT firms. Increase in their cost of trading in markets may impact the overall volumes and spreads for retail may go up.

But it seems that there is some confusion and uncertainty in the trading community following the government's decision to raise Securities and Transaction Tax (STT) on the sale of options from 0.017% to 0.021%. The markets have discovered that the existing STT is already levied at a higher rate of 0.05%, which has caused further confusion.

The Finance Ministry is expected to issue a clarification note and make the required changes.

The Bank Nifty bears took over the control on the last day of the week and the index ended on a negative note. The index as long as does not surpass the level of 40000 remains in a sell on rise mode.

The immediate support on the downside is at 39000 and a breach below this will lead to a sharp decline. The momentum indicator RSI trading in the bearish zone confirms the weakness in the index.

Cues from both the global and domestic markets were subdued. The asset management industry was hit hard by tax changes and the elimination of the indexation benefit of debt mutual funds. The volatility was fuelled by weak European markets, which was driven by banking stocks as CDS spread increased. Although all major sectors traded in the red, selling in the IT sector was limited despite warnings of muted growth.

Indian rupee closed 22 paise lower at 82.48 per dollar against previous close of 82.26.

: Benchmark indices ended lower on March 24 with Nifty below 17,000.

At close, the Sensex was down 398.18 points or 0.69% at 57,527.10, and the Nifty was down 131.90 points or 0.77% at 16,945. About 1030 shares advanced, 2381 shares declined, and 130 shares unchanged.

Bajaj Finserv, Bajaj Finance, Adani Enterprises, Tata Steel and Hindalco Industries were among the biggest Nifty losers. The gainers were Cipla, Kotak Mahindra Bank, Dr Reddy's Laboratories, Infosys and Apollo Hospitals.

All the sectoral indices ended in the red with PSU Bank, Metal, Realty down 2 percent each, while Capital Goods, Oil & Gas down 1 percent each.

The BSE midcap and smallcap indices shed over 1 percent each.

The change in debt taxation would meaningfully impact allocation decision. For the same expected return, investors will have to take higher risk going forward. Assuming an investors target return was post tax 7% pa over 3 years, that is currently achievable by investing 100% in a Target maturity fund that invested in AAA papers.

Going forward, assuming yields don’t change, the investor will have to invest over 25% in equities (assuming 13% equity return), to achieve the same target return! The change is risk is high.

-Managed services bookings were strong
-Q3 guidance is broadly in-line with consensus at mid-point
-Investors will await guidance commentary from Infosys/HCL Technologies
-Remain cautious on Indian IT, given tough macro environment
-Relatively, like Infosys, is only buy in the sector