Taking Stock | Market snaps eight-day winning streak, erases weekly gains; Nifty below 17,800

Stock Market News

After rising for eight sessions in a row, the market took a breather on August 19 as investors opted to book profit in some of the counters that rallied in recent days. Both the headline indices, the S&P BSE Sensex and NSE's Nifty settled over 1 percent lower. With today's fall, the benchmark indices almost erased the weekly gains.

At close, the 30-share Sensex stood at 59,646.15, down 652 points, or 1.08 percent while the broader Nifty shut shop at 17,758.45 levels, down 198 points, or 1.10 percent.

For the week, both BSE Sensex and Nifty50 rose 0.30 percent each.

The volatility index, India VIX, surged over 5 percent to 18.28 levels, indicating heightened volatility in the market.

"Profit booking amid weak global cues impacted domestic indices as concerns about interest rate hikes hung over the markets," said Vinod Nair, Head of Research at Geojit Financial Services.

"Additionally, the recent rally of the dollar index and FIIs turning net sellers have surprised bulls. Broad-based selling was witnessed with the index heavyweights dragging the index further down," Nair added.

IndusInd Bank, Apollo Hospitals, Bajaj Finserv, Tata Motors, and Tata Consumer Products were among the major Nifty losers. The gainers were Adani Ports, L&T, Infosys, Eicher Motors, and Bajaj Auto.

Among sectors, Nifty Bank, Auto, FMCG, Metal, and Pharma were down 1-1.5 percent, while the Nifty PSU Bank index fell 2.6 percent.

Also Read - Nifty snaps longest winning streak in 2 years: Here’s what is driving the fall

Stocks and sectors

On the BSE, except Capital Goods, and Power all other sectoral indices ended in the red with the Realty index shedding 2 percent, while auto, bank, FMCG, healthcare, metal, and oil & gas were down 1 percent each.

BSE midcap and smallcap indices shed 1 percent each.

A short build-up was seen in PVR, Granules India, and Jubilant FoodWorks, while a long build-up was witnessed in Adani Ports, IRCTC, and L&T.

Among individual stocks, a more than 400 percent volume spike was seen in Piramal Enterprises, Tata Chemicals, and Tata Communications.

Adani Enterprises, Adani Transmission, Eicher Motors, ITD Cementation India, Rama Steel Tubes, and Tata Chemicals were among the BSE stocks, that touched their 52-week highs.

Outlook for August 22

Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities

Interest rate sensitives such as banking, auto & realty stocks witnessed heavy profit-taking and halted benchmark indices' 7-day winning streak. Investors pressed the sell button after the recent US FOMC minutes indicated that the Federal Reserve may go for rate hikes in its next meeting, which prompted local investors to prune their holdings after the recent run-up.

Technically, the Nifty witnessed profit booking near the 18,000 level, while on daily charts, the index has formed a long bearish candle and also broke the important support level of 17,850 which is broadly negative.

In addition, it has also formed Hammer candlestick formation indicating further weakness in the near future. Below 17,900, the correction formation is likely to continue and could retest the level of 17,600-17,500. On the flip side, 17,900 – 17,950 would act as an immediate hurdle for the bulls. A fresh uptrend is possible only if the index clears the resistance of 17,950, which could then take it further to 18,050-18,150 levels.

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

The equity market started the week on a positive note, but the correction on Friday erased most of the weekly gains. BSE Midcap and BSE Small cap index outperformed the BSE-30 and Nifty-50 indexes. Most sectoral indices saw marginal gains during the week.

The recent market rally possibly reflects increasing expectations about the peaking of inflation, commodity price correction, and decent earnings visibility. India’s July 2022 CPI inflation saw moderation. Further, some decline is being witnessed in oil prices. Q1FY23 results were broadly on expected lines. FPIs flows have started to turn favourable.

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