Closing Bell: Nifty ends FY21 below 14,700, Sensex falls 627 pts dragged by IT, banks

Taking Stock: Market Loses 1% On Weak Global Cues But FY21 Best Ever In Absolute Terms

FY21 was the best fiscal year in absolute terms—the Sensex gained 20,040.66 points and Nifty added 6,092.95 in FY21.

The market retreated from the day's highs and continued to consolidate throughout the day. The bias was negative and most of the index heavyweight shares closed lower. The market width was 1:1 and therefore the market trend could not be determined. The trading range for tomorrow's market could be 14650/49300 and 14550/49000. The market could see 14400/48700 levels below 14550/49000 levels. Beyond 14750/49700, the market could pick up speed again. In short, hold long poses until 14550/49000 breaks. Today, the Bank Nifty did not rise as expected. However, there also we feel 33000 would act as major support.

Markets took a breather after the recent rebound and lost nearly a percent on the last trading day of the financial year. The benchmark opened gap down and traded with negative bias throughout the session citing mixed cues. Finally, the Nifty ended near day’s low to close at 14,690 levels.

A mixed trend was witnessed on the sector front wherein banks, IT and energy were the top losers while realty, FMCG and consumer durables were the gainers. On the flip side, the broader markets outperformed wherein midcap and smallcap closed with gains of 0.3% and 0.4%.

We’re seeing erratic swings during this consolidation phase and the divergence between Nifty and the banking index is further adding to the participants' worries. Traders should limit leveraged positions and focus more on the selection of stocks. In absence of any major event, global cues and COVID-related updates will remain in focus.

Despite a truncated week, the forex market has been very volatile. The spot breached 73 on the back of uptrend in dollar. The market focus is on Biden's additional stimulus announcement and an additional spending boost will further support the dollar rally. But the best thing to do for now is to follow the trend and let the market tell you where it's going to end. In USDINR spot we expect the trading range to be 72.50-73.50.

Markets opened weak as Joe Biden shall unveil his infrastructure package today with an increase in corporate taxes. HDFC twins and profit booking in IT stocks led the decline today even as cement and real estate stocks saw keen investor interest. In the broader market, PSU Banks and select pharma names were seen buzzing around.

Weak cues from across the globe forced the domestic market to shed yesterday’s optimism. US markets had a weak close after the US bond yield reached near its 14 month high level while European and Asian markets followed the trend. Private banks were the sectorial laggards due to selling seen in heavyweights. However, mid cap and small cap stocks remained in positive territory today.

A lot is happening on the global market front - steep rise in dollar index and the US bond yields increasing. All of this has led to increased volatility in domestic markets. We believe the market remains in medium term uptrend; current momentum bottom is seen at 13450 and resistance seen at 15600; we expect range bound activity with high volatility.

Expect stock specific action to continue – FMCG, IT and Insurance sectors trade with positive bias providing value buying opportunities.

The markets failed to get past 14950. The opening level of the Nifty was also the day high which means the sentiment for the day has been bearish. If we get past 14950, we can project a target of 15200-15300. If we continue falling and break 14500 on a closing basis, the index could drift further to test the recent low of 14250.

Despite a lackluster movement, Nifty50 Index held the support level around the level of 14600. Trading above 14600 is positive from a short-term perspective. Sustaining above 14600 levels, it is expected that the market to gain momentum to increase the odds of a fresh breakout above 14900. The momentum indicators like RSI and MACD support the upside move and indicate that a new breakout's potential is exceptionally high with an upside projection till the 15300 levels.

Benchmark indices ended the last trading day of the Financial Year 20-21 with a percent loss dragged by the IT, banking and energy stocks.

At close, the Sensex was down 627.43 points or 1.25% at 49,509.15, and the Nifty was down 154.40 points or 1.04% at 14,690.70. About 1362 shares have advanced, 1470 shares declined, and 190 shares are unchanged.

HDFC, HDFC Bank, Tech Mahindra, Power Grid Corp and Coal India were among major losers on the Nifty, while gainers were GAIL, Grasim Industries, Bajaj Finserv, UPL and ITC.

Among sectors, IT, bank, energy and infra sectors fell 0.4-1.7 percent, while PSU Bank index added over a percent. BSE Midcap and Smallcap indices ended in the green.