Closing Bell: Nifty ends below 15,800, Sensex falls 136 pts; power & metal drag, autos shine

Indian markets started on a positive note but later wiped off all the gains in later half. We still believe that markets might fall further on inflation and rate hike worries.

Investors are advised to remain invested in quality stocks and keep adding stocks on major dips in SIP mode. Further trading with strict targets and stop loss is recommended.

Technically, The Nifty has formed a bearish candle on the weekly chart which indicates downside movement for the upcoming session. Moreover, Nifty has faced resistance from rising trendline and showed selling pressure which is a sign of selling of higher levels.

In addition, Nifty has been sustained below the neck line of the Head & Shoulder pattern which indicates southward direction for the upcoming session. However, the momentum indicators MACD & Stochastic were trading with a negative crossover and entered the oversold zone.

However, till now, there is no reversal sign. The Nifty may find support around 15700 levels, while on the upside 16100 may act as an immediate hurdle for the Nifty crossing above the same can attract fresh buying. On the other hand, Bank nifty has support at 32600 levels while resistance at 34000 levels.

Volatility was once again the order of the day and key indices snapped early gains on late selling pressure in metals, telecom & banking stocks.

The fall came despite an upsurge seen in other Asian gauges, as the fear of rising inflation and expectations of more rate hikes in the near term weighed on investors' minds.

It looks like traders are selling at every opportunity given that there seems to be no respite from the negative news flows. After a sharp price correction, on weekly charts, the Nifty has formed a bearish candle and after a long time it closed below 16000 mark which is broadly negative.

For traders, 15900 would act as a key resistance level and below which the index could slip till 15650. However, 15900 would be the immediate trend reversal level for the bulls and above which we could see a strong pullback rally up to 16100-16300.

In Chart | FIIs pull out $19.56 billion from Indian equities this year. Where is the money moving?

Amid the global uncertainties and tightening of money trails, foreign investors had no other choice but to relook at their portfolios. Within Asia, Japan turned to be their favorite

High domestic inflation data failed to spook investors since the recent selloff has already absorbed the ongoing uncertainties in the market.

Domestic markets witnessed a rebound as buyers took the recent correction into their advantage following the trend of the global market.

However, the weakness seen in the banking sector triggered a late selloff. The US Fed cautioned against an aggressive policy stance in order to bring inflation under the Fed’s comfort zone of 2%.

Global and domestic equity markets saw sharp decline this week as investors are worried about growth expectations amid elevated inflation levels. Sensex 30 and Nifty 50 index was down by close to 3%. BSE Midcap and BSE Smallcap index saw higher correction in the range of 5-6%. Almost all sectoral indices reported decline this week.

In India, the CPI inflation in April 2022 surged to 7.79% (March 2022 : 6.95%), while March 2022 IIP growth remained subdued at 1.9% (February 2022: 1.5%).

FII’s continued their selling of Indian equities this week. Rising bond yields, high inflation levels and monetary policy tightening action by Central Banks globally will weigh on near term sentiments which could keep markets volatile. Stock specific action will continue due to ongoing result

Indian rupee ended flat at 77.44 per dollar against Thursday’s close of 77.42.

Benchmark indices erased all the intraday gains and ended lower for the sixth consecutive session on May 13.

At close, the Sensex was down 136.69 points or 0.26% at 52,793.62, and the Nifty was down 25.80 points or 0.16% at 15,782.20. About 2097 shares have advanced, 1166 shares declined, and 128 shares are unchanged.

Hindalco Industries, SBI, JSW Steel, NTPC and ICICI Bank were among the top Nifty losers. Gainers included Tata Motors, Sun Pharma, M&M, ITC and HUL.

On the sectoral front bank, metal and power indices ended 1-2 percent lower, while auto, FMCG, pharma indices rose 1-2 percent.

BSE midcap index rose 0.8 percent and smallcap indices added 1.3 percent.

The broking house Morgan Stanley has kept overweight rating on Tata Motors with a target price at Rs 560 per share.

JLR is set to have a weak Q1 but FY23 guidance a positive surprise. Unlike in 2018 downcycle, company now better placed on JLR, as well as India PVs & CVs.

JLR guided facing headwinds, Q1 EBIT margin & FCF may be negative, reported CNBC-TV18.