Amid weak global cues, the domestic equity benchmarks slipped about a percent each on January 8. Nervousness ahead of earnings Q3 season and profit booking also had an impact. Banks, financial services and FMCG were among the biggest drags.
The Sensex closed 670.93 points, or 0.93 percent, lower at 71,355.22. The Nifty declined 197.80 points, or 0.91 percent, to end the day at 21,513.
Market breadth was neutral. About 1,753 shares advanced, 1,746 declined and 83 remained unchanged.
"The market witnessed widespread selling as the euphoria over early rate cuts may diminish due to the better-than-expected non-farm payroll data from the US and the consequent rise in the US 10-year yield,” said Vinod Nair, Head of Research, Geojit Financial Services.
“In the near term, investors’ trade positions will be more inclined towards the upcoming result season. While the outset may be tempered by lower expectations in the IT sector, the overall forecast for earnings growth remains optimistic, projecting double-digit figures."
Broader market underperformed. Nifty Midcap 100 fell 1.06 percent while Nifty Smallcap 100 dipped 0.62 percent. Nifty 500, the broadest index on NSE, dipped 0.88 percent.
Stocks and sectors
Barring Nifty Media and Nifty Realty that rose about 0.1 percent each, all sectoral indices ended with cuts. Nifty FMCG was the biggest loser, down 1.72 percent. Nifty Bank followed with 1.47 percent cut while Nifty Financial Services dropped 1.03 percent.
Among Nifty 50 stocks, Adani Ports was the biggest gainer, rising 1.57 percent. ONGC, NTPC and Sun Pharma were other gainers. UPL was the biggest loser, down 3.44 percent, followed by SBI Life Insurance, M&M, SBI and Tech Mahindra that fell 2-3 percent.
OUTLOOK for Jan 8
Nagaraj Shetti, Senior Technical Research Analyst, HDFC Securities
The positive chart pattern like higher tops and bottoms is intact, but the formation of new lower top at 21763 could be an alarming signal for bulls at the higher levels. The immediate support of 10day EMA has been violated on the downside again today at 21560 levels.
The short-term trend of Nifty has turned down from the highs after a small rise and the selling pressure seems to have started to emerge from near 21750-21850 levels. The next lower supports to be watched at 21350, which is a 20-day EMA. Immediate resistance is placed at 21650 levels.
Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities
Nifty ended the day close to its support at 21,500 and the short-term 14-day moving average, accompanied by a bearish engulfing candlestick pattern. This indicates a change in market sentiment. If 21,500 is breached in closing figures, Nifty may move towards the next support level at 21,200. The support of 21500 if held can see recovery towards 21650 which is the immediate hurdle zone.
Ajit Mishra, SVP - Technical Research, Religare Broking
Nifty has engulfed the gains of the last three sessions and may slip further towards the support zone of 21200-21300 levels. The move shows that participants are in the profit taking mood citing a dip in the US markets and caution ahead of the earnings. Amid all, traders should keep a check on aggressive longs and accumulate quality stocks on dips.
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