The Indian equity market snapped a nine-day winning streak on April 17 following a rout in information technology (IT) stocks, with heavyweight Infosys sinking nearly 15 percent during the day on lower-than-expected earnings and a dismal revenue outlook.
At close, the Sensex was down 520.25 points, or 0.86 percent, at 59,910.75, and the Nifty was down 121.20 points, or 0.68 percent, at 17,706.80.
Amid mixed global cues, the market started gap-down and extended losses as the day progressed led by IT stocks, capital goods and pharma. Buying in PSU bank, metal, FMCG and auto limited the losses.
The IT index was the major loser, dragged down by Infosys, which tumbled 15 percent but narrowed losses to close 9.37 percent lower at Rs 1,250.30. LTIMindtree was down 6.96 percent at Rs 4,482.00, Tech Mahindra 5.18 percent at Rs 1,035, Persistent Systems 4.14 percent at Rs 4,200 and Coforge closed 3.33 percent down at Rs 3,888.
Also Read: Infosys Q4 results: Revenue rises 16 percent, profit up 8 percent YoY, but miss Street estimates
Stocks and Sectors
Infosys, Tech Mahindra, HCL Technologies, NTPC and Larsen and Toubro were among the major losers on the Nifty. The gainers included Nestle India, Power Grid Corporation, SBI, Britannia Industries and Coal India.
On the sectoral front, the IT index fell 4.7 percent and the pharma index 0.6 percent. The PSU Bank index was up 3 percent. Oil & gas, realty and FMCG indices rose a percent each.
| Index | Prices | Change | Change% |
|---|---|---|---|
| Sensex | 80,787.30 | 76.54 | +0.09% |
| Nifty 50 | 24,773.15 | 32.15 | +0.13% |
| Nifty Bank | 54,186.90 | 72.35 | +0.13% |
| Biggest Gainer | Prices | Change | Change% |
|---|---|---|---|
| Tata Motors | 719.50 | 27.80 | +4.02% |
| Biggest Loser | Prices | Change | Change% |
|---|---|---|---|
| Trent | 5,315.50 | -213.00 | -3.85% |
| Best Sector | Prices | Change | Change% |
|---|---|---|---|
| Nifty Auto | 27189.20 | 868.60 | +3.30% |
| Worst Sector | Prices | Change | Change% |
|---|---|---|---|
| Nifty IT | 34310.45 | -325.35 | -0.94% |
The BSE midcap index added 0.5 percent, while the smallcap index was up 0.15 percent.
Also Read: Bleeding tech stocks, Fed fears, and other factors behind 1.2 percent slump in markets
Infosys, India Glycols, Vivimed Labs, Mphasis, and Wipro were among the stocks to touch their 52-week low on the BSE.
On the other hand, ITC, NCC, Ultratech Cement, HDFC, HDFC Bank, Dr Reddy's Laboratories, DLF, Zydus Lifesciences, Aditya Birla Capital and CSB Bank rose to their 52-week high.
A long build-up was seen in Aditya Birla Capital, RBL Bank and Nestle India, while a short build-up was seen in Infosys, LTIMindtree and Tech Mahindra.
Among individual stocks, a volume spike of more than 200 percent was seen in Nestle India, Info Edge India and Aditya Birla Capital.
Also Read: Wholesale inflation drops to 1.34 percent in March, lowest in 29 months
Outlook for April 18
Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
The Nifty closed in the negative after nine consecutive positive trading sessions. On the daily charts, the Nifty faced resistance at 17,850–17,870, which coincided with the 50 percent Fibonacci retracement level (17,858) of the fall from 18,888–16,828.
During the second half of the session, the Nifty saw some recovery which helped it to close off the intraday low of 17,574. The daily momentum indicator still has a positive crossover, which is a buy signal.
The uptrend is still intact and the dip should be used as a buying opportunity. In terms of levels, 17,860–17,900 would be the immediate hurdle, while 17,560–17,500 would be the crucial support in the short term.
On the upside, we expect the Nifty to target 18,000.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
The much-anticipated profit-taking came to the fore, as technology stocks led the correction that saw the Sensex slump below the psychological 60,000 mark. The real damage was done by the frontline IT stocks, with Infosys coming under severe hammering after its corporate earnings failed to meet street estimates.
Besides disappointing results, worries of weak IT spending by multinational giants on gloomy economic conditions and recessionary fears weighed on the sector.
On the daily charts, the Nifty formed a bar-reversal candlestick, indicating time-based correction till the market doesn’t cross 17,870.
For the bulls, 17,800-17,870 will act as immediate resistance, while 17,600-17,500 will act as key support. Fresh buying will only be seen above 17,870.
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