The Indian indices continued to be engulfed in volatility as they oscillated between the positive and negative territories amid growing chances of the US economy slipping into a recession. That apart, aggressive measures being mulled by global central banks to fight worsening inflation, too, dented investor sentiment.
At close, the 30-pack BSE Sensex was down 135.37 points or 0.26 percent at 51,360.4 while the benchmark Nifty ended the day with a loss of 67.1 points or 0.44 percent at 15,293.5.
On a weekly basis, the indices ended lower by nearly 6 percent.
Rising inflation and policy tightening by global central banks are forcing the market to discount the possibilities of recession. “With central banks’ policy tone pointing towards continued rate hikes of higher magnitude, we can expect FIIs to maintain their selling spree,” said Vinod Nair, Head of Research at Geojit Financial Services.
The domestic market will continue to trade with high volatility in the near term; however, the ongoing corrections are opportunities in disguise for medium to long-term investments, Nair added.
Globally, the investor sentiment remained bearish after a steep fall in the US markets late Thursday evening. The Bank of England (BoE) raised the interest rates by 25 bps while a surprise rate hike of 50 bps by the Swiss National Bank (its first in 15 years) aggravated the bearishness further.
Rate hikes by Switzerland and Britain on Thursday reignited fears that attempts by central banks to curb inflation could lead to sharply slower growth worldwide or a recession. BoE forecast British inflation to soar further this year to above 11 percent.
Earlier in the morning, the indices opened lower with a loss of 0.6 percent and tanked further as the Nifty briefly breached the psychological support of 15,200 to create its fresh 52-week low of 15,183.4. As the volatility tightened its grip, the bulls tried to wrest control as they swung the Nifty by 217 points to create an intra-day high of 15,400 but they couldn’t sustain the up move as the indices remained in the negative territory for a major part of the day.
The BSE Sensex also broke the strong support of 51,000 as it created a fresh 52-week low of 50,921.22 before recouping the losses to create an intra-day high of 51,652.83.
A strong opening to the European markets helped lift the Indian indices to a certain extent during the closing session.
Stocks & Sectors
Among sectors, barring banks & financial services and metals, all other sectors ended in red, with the pharma index losing the most - 2.18 percent. This was followed by the IT index, that skid 1.49 percent during the day. Auto and FMCG indices too were down nearly 1 percent today.
The bearishness was widespread as the broader indices too ended with losses. The BSE Midcap was down 0.68 percent while the BSE Smallcap lost 0.88 percent.
On a weekly basis, all sectors ended in the red, with metals losing the most. Within the Nifty Index, Hindalco Industries (-16 percent), Tech Mahindra (-14 percent), and Tata Steel (-14 percent) were among the biggest losers, while Divi’s Laboratories (+2%), Britannia Industries (+1%), and Nestle India (+1%) gained the most.
The India VIX, which indicates the degree of volatility traders expect over the next 30 days, dipped slightly by 0.48 percent from 22.87 to 22.76.
Titan, Wipro, Shree Cements, HDFC Life, and BPCL were the top losers on the Nifty as they lost between 3.42 to 6.04 percent.
Bajaj twins - Bajaj Finance & Bajaj Finserv, JSW Steel, Coal India, and ICICI Bank, were the top gainers as they ended the day with gains of 1.23 to 2.57 percent.
Among specific stocks, the short build-up was seen in Titan, Mphasis, and Indiamart while long build-up was witnessed in Sun TV, Indus Towers, and Intellect Design Arena.
Of the 3,421 stocks traded on the BSE, there were 1,074 advances for 2,253 declines while 94 stocks remained unchanged.
Outlook for June 20
Ajit Mishra, VP - Research, Religare Broking Ltd
Markets ended lower in a volatile trading session, in continuation of the prevailing trend. After the tepid start, the benchmark continued to hover in a range till the end. Meanwhile, mostly sectoral indices traded with a negative bias, and the broader indices too lost nearly a percent each.
Markets are largely taking cues from the global markets, in absence of any major domestic event. And, going ahead, the US Fed chairman's speech and China's interest rate decision would be important triggers for the markets. On the domestic front, the COVID trend and the progress of the monsoon will also be in focus. We reiterate our negative view on markets and suggest continuing with the “sell on rise” approach.
Deepak Jasani, Head of Retail Research, HDFC Securities
Nifty fell and formed a Doji after the recent down move on June 17, suggesting the possibility of an upward reversal. This is after a 5.6% fall over the week, the highest since May 2020. The low of June 17 (15,183) will hence be crucial while on rises 15,335 and 15,659 can act as resistance.
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities Ltd
The undertone of the market continued to remain bearish with weak global cues dampening investors' sentiment. Investors are trading with caution after the aggressive rate hike by the US Fed. Moreover, FII selling is showing no signs of easing, which continues to have a bearing on the markets. For the traders now, 15,400 would act as a trend decider level and above the same, the Nifty could touch the level of 15,600-15,700.
On the other hand, below 15,400, the index could retest the level of 15,200. Further downside may also continue which could drag the index to 15,000. Meanwhile, after a long time, on weekly charts, the Bank Nifty closed below the important support level of 33,000. The structure suggests below 33,000, it could slip up to 32,000-31,500.
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