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Taking Stock | Bears halt 4-day rally on 'hawkish' Fed, rising Omicron cases

Broader indices outperformed the benchmarks with BSE midcap and smallcap indices ended on flat note.

January 06, 2022 / 04:22 PM IST

The market snapped four-day winning streak and ended lower on January 6 on the back of weak global markets amid rising concerns over increasing Omicron cases and Hawkish Federal Reserve stance.

Market opened gap-down and extended the fall further as the day progressed, but saw some recovery from the low but closed the day with a percent loss with Sensex falling 621.31 points or 1.03% at 59,601.84, and the Nifty down 179.40 points or 1% at 17,745.90.

The Federal Reserve meeting minutes released yesterday pointed the raising of interest rates sooner than expected.

"The day witnessed a gap-down opening on the back of weak global cues and hawkish FOMC minutes which saw the US 10-year yield rising to 1.7%," said S Ranganathan, Head of Research at LKP securities.

"Bulls were a bit restrained on the back of rising covid cases and its impact on the fourth quarter corporate performance since it happens to be an important quarter for India Inc. The IT & Oil & Gas Index led the fall today with Cement stocks, too, witnessing profit taking," Ranganathan added.

Close

JSW Steel, UltraTech Cement, Tech Mahindra, Shree Cements and Reliance Industries were among the top Nifty losers. Gainers included UPL, IndusInd Bank, Bajaj Auto, Bharti Airtel and Eicher Motors.

On the sectoral front, Nifty Auto and PSU Bank indices gained 0.5 percent each. However, IT index fell 1 percent and Nifty Bank, FMCG, Metal and Pharma indices fell 0.5 percent each.

Broader indices outperformed the benchmarks with BSE midcap and smallcap indices ended on flat note.

IndexPricesChangeChange%
Sensex60,098.82-656.04 -1.08%
Nifty 5017,938.40-174.65 -0.96%
Nifty Bank38,041.35-168.95 -0.44%
Nifty 50 17,938.40 -174.65 (-0.96%)
Wed, Jan 19, 2022
Biggest GainerPricesChangeChange%
ONGC170.256.40 +3.91%
Biggest LoserPricesChangeChange%
Infosys1,867.05-53.70 -2.80%
Best SectorPricesChangeChange%
Nifty PSU Bank2801.6560.45 +2.21%
Worst SectorPricesChangeChange%
Nifty IT37281.70-810.10 -2.13%

Stocks and sectors

On the BSE, except auto and oil & gas, all other sectoral indices ended lower with IT and Realty indices down over 1 percent each.

A long build-up was seen in NBCC, Aditya Birla Capital and RBL Bank, while there was a short build-up in Tata Communications, Tech Mahindra and City Union Bank.

Among individual stocks, a volume spike of more than 200 percent was seen in NBCC, Gujarat Gas and Bharti Airtel.

More than 400 stocks, including Sunteck Realty, Thermax, KPR Mills and Balrampur Chini Mills hit a 52-week high on the BSE.

Technical View

The Nifty formed a small bodied bearish candle on daily scale with longer lower shadow indicating declines were bought.

"The Nifty has to hold above 17,777, for an up move towards 18,000 and 18,200, whereas support shifts higher to 17,600 and 17,500 zones," said Chandan Taparia, Analyst-Derivatives, Motilal Oswal Financial Services.

Outlook for January 7

Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments:

Despite opening down with a gap, the index was quick to bounce from the lows. Until we do not break 17200, the short term trend of the market is positive.

Intraday corrections can be utilized to accumulate long positions for a target of 18050-18100. A closing below 17200 would be the stop.

Sachin Gupta, AVP-Research at Choice Broking:

On a technical chart, the Nifty index has taken immediate resistance at upper Bollinger Band formation and traded below it. However, on a four hourly chart, the stock has still been trading above the Horizontal Line, which is acting as an immediate support zone.

An indicator MACD & RSI is still trading with a positive crossover that supports the bullish trend. At present, the index has support at 17600 levels while resistance at 18000 levels. On the other hand, Bank Nifty has support at 36700 levels while resistance at 38000 levels.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:

The texture of the market is volatile and remain volatile in the near future. Hence, level-based trading would be the ideal strategy for day traders. Now, 17700/59000 would act as an immediate support level for the bulls. Above the same uptrend, the move will continue up to 17800-17875/59800-60000. On the flip side, trading below 17700/59000 could drag the index up to 17650-17610/58800-58600.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decisions.
Rakesh Patil
first published: Jan 6, 2022 04:21 pm

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