Moneycontrol PRO
Upcoming Event:Attend Algo Convention Live, 2 Days & 12+ Speakers at best offer Rs.999/- for Moneycontrol Pro subscribers. Price Increasing Soon!

Taking Stock | Bears tighten grip, market plunges for the third day

IT stocks saw selling pressure for the third day. Bajaj Finserv, Infosys, TCS, Divis Lab and Bajaj Auto were the top Nifty losers

January 20, 2022 / 04:59 PM IST

Indian equity benchmarks saw heavy losses for the third straight session, falling more than a percent each on weak global cues and continued selling by FIIs amid concerns over rising bond yields.

The Sensex ended the day 634.20 points, or 1.06 percent, lower at 59,464.62, and the Nifty was down 181.40 points, or 1.01 percent, at 17,757.

The indices managed to curtail some of the losses in the last hour after the Sensex plunged 1,030.51 points to 59,068.31 and the Nifty touched the day’s low of 17,648.45, down 290 points.

“Markets remained under pressure for the third successive session and lost nearly a percent. The tone was negative from the beginning, tracking weak global cues which further deteriorated as the day progressed. However, a rebound in the final hour trimmed some losses,” said Ajit Mishra, VP-Research, Religare Broking.

All sectors ended in the red, with IT, FMCG, banking and pharma were the top losers, Mishra said.

Close

Bajaj Finserv, Infosys, TCS, Divis Lab and Bajaj Auto were the top Nifty losers, while gainers included Power Grid Corporation, Bharti Airtel, Grasim Industries, JSW Steel and Britannia Industries.

On the sectoral front, Nifty FMCG, IT and pharma indices were down a percent each, while the metal index added 0.5 percent.

BSE midcap and smallcap indices ended flat.

IndexPricesChangeChange%
Sensex54,716.00463.47 +0.85%
Nifty 5016,304.60134.45 +0.83%
Nifty Bank35,452.90358.00 +1.02%
Nifty 50 16,304.60 134.45 (0.83%)
Fri, May 27, 2022
Biggest GainerPricesChangeChange%
HCL Tech1,005.4024.70 +2.52%
Biggest LoserPricesChangeChange%
ONGC147.70-4.20 -2.76%
Best SectorPricesChangeChange%
Nifty IT28537.20604.65 +2.16%
Worst SectorPricesChangeChange%
Nifty Energy25682.00-78.50 -0.30%

Stocks and sectors

On the BSE, except power, realty and metal, all sectoral indices are trading in the red with auto, IT, FMCG and pharma indices down 0.8-1.7 percent.

Long build-up was seen in the Cholamandalam Financial Holdings, Power Grid and Deepak Fertilizers and short build-up was seen in the Tata Communication, Bajaj Finserv and Oracle Financial Services Software.

Among individual stocks, a volume spike of more than 200 percent was seen in ICICI Lombard General Insurance Company, Syngene International and Oracle Financial Services Software.

More than 300 stocks, including Tata Elxsi, IL&FS Engineering, DB Realty and Coffee Day Enterprises, hit a 52-week high on the BSE.

Technical View

The Nifty formed a bearish candle on the daily scale and lower lows from the third day.

"Till the Nifty remains below 17,850 zones, weakness could be seen towards 17,650 and 17,500, whereas hurdles exist at 17,950 and 18,081 marks," said Chandan Taparia, Analyst-Derivatives, Motilal Oswal Financial Services.

Outlook for January 21

Rupak De, Senior Technical Analyst at LKP Securities

Throughout the session, the Nifty remained below 10EMA, which suggests a near-term weak trend. As long as the Nifty stays below 17,900, weakness will persist.

On the lower end, support is seen at 17,610.

Sachin Gupta, AVP-Research, Choice Broking

Technically, the index has corrected almost 700 points in the last three sessions and the Bearish Engulfing pattern indicates a further correction on the daily chart. However, in the recent candle, the index tested immediate support at 38.2 percent RL of its previous rally.

Moreover, the index has failed to sustain below the 21–day simple moving average that suggests support around 17,640, below which the correction may extend to 17,400-17,300.

The index has support at 17,640-17,500 levels, while resistance comes at 18,000. The Bank Nifty has support at 37,500, while resistance is at 38,400.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas

The Nifty continues to see selling pressure. As a result, it has fallen towards its key DMAs as well as near the 20 WMA. These moving averages are placed near 17,700-17,600.

The 38.2 percent retracement of the entire December–January rally is near 17,610. Thus, the Nifty has now reached the key short-term support zone of 17,700-17,600.

The index can form a base over here and attempt a bounce. On the higher side, 18,000 will act as a near-term barrier.

The hourly moving averages have also come down to around 18,000. Going ahead, 17,600-18,000 is expected to be the near term range for the Nifty.

Sahaj Agrawal, Head of Research-Derivatives, Kotak Securities

The Nifty broke its momentum support levels of 17,900 and tested 17,700.

In the short term, selling pressure can push the index towards 17,350-17,450 mark. The medium-term outlook remains intact, as we don’t see any signs of a trend reversal.

On the higher side, expect 19,000-19,500 to be conquered. Value is seen in the energy and NBFC space, while other high beta sectors are expected to remain volatile.

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.

 



Download your money calendar for 2022-23 here and keep your dates with your moneybox, investments, taxes

Rakesh Patil
first published: Jan 20, 2022 04:59 pm
Sections
ISO 27001 - BSI Assurance Mark