Taking Stock: Market snaps six-day record run; Investors lose Rs 1.92 lakh crore

Infosys reported an 11 percent increase YoY in its net profit to Rs 5,945 crore in the first quarter of the 2024 fiscal, missing market expectations. However, it slashed its revenue guidance for the fiscal to 1-3.5 percent from 4-7 percent, amid an increasingly challenging demand environment.

The biggest losers for the day on the Nifty were Infosys, Tech Mahindra, HCL Technologies, HUL and Reliance Industries, while gainers were L&T, ONGC, NTPC, SBI and BPCL.

Among the sectors, IT was down 4 percent, FMCG shed 1 percent, Metal was down nearly 1 percent, while the Capital Goods index was up 1.7 percent.

The BSE Midcap and Smallcap indices ended with marginal change.

Today's fall eroded investors' wealth by Rs 1.92 lakh crore, as the market capitalisation of BSE-listed companies slipped to Rs 302.12 lakh crore from Rs 304.04 lakh crore in the previous session.

A long build-up was seen in Indiamart Intermesh, Atul and United Spirits while a short build-up was seen in Infosys, Persistent Systems and Dalmia Bharat.

Among individual stocks, a volume spike of more than 500 percent was seen in Atul, Shriram Finance and PI Industries.

ICICI Bank, Samvardhana Motherson International, Poonawalla Fincorp, Indiamart Intermesh, L&T, Texmaco Rail & Engineering, Jammu & Kashmir Bank, Rites, Glenmark Pharmaceuticals, Usha Martin, Cupid, Ashok Leyland, Ucal Fuel Systems, touched their 52-week high on the BSE.

Outlook for July 24

Amol Athawale, Technical Analyst (VP), Kotak Securities

Overnight fall in tech-heavy Nasdaq triggered a wave of massive correction in local software stocks led by Infosys, which slashed the revenue growth guidance for the rest of the year due to sharp deterioration in discretionary spending by the clients. The record upsurge in the markets in such a quick time was already raising concerns of expensive valuations, and hence investors took this opportunity of weak US cues to prune their holdings, although India's fundamentals remain on strong footing.

Technically, on the intraday charts, the Nifty has breached the crucial support of 19,825 and post breakdown it is comfortably trading below the same, which is largely negative. In addition, a sharp intraday correction and reversal formation on daily charts is also indicating temporary weakness. Below 19,825, the weak sentiment is likely to continue below the same and could slip till 19,600-19,550.

On the flip side, a fresh uptrend rally is possible only after the dismissal of 19825 and above the same, the index could retest the level of 19,900-19,950. Contra traders can take a long bet near 19,550 with a strict stop loss of 30 points.

For Bank Nifty, 45,800-45,500 would be the key levels to watch out for and above the same, the index could move up to 46,500-46,900. On the flip side, below 45,500 uptrend would be vulnerable.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services

Domestic equities took a pause just before the 20k zones. Nifty opened lower dragged by selling in IT heavyweights after Infosys lowered its FY24 growth guidance. Nifty closed with a loss of 234 points (-1.2 percent) at 19,745 levels. Broader markets were mixed with the Nifty midcap 100 down -0.4 percent while the Nifty smallcap 100 was up +0.7 percent. Except for PSU Bank and Auto, all sectors ended in red. IT, Consumer Durables, and FMCG were major laggards.

All eyes will be on the US Fed and ECB policy meeting next week. Investors would also take cues from various macro data that would be released. With the result season picking up pace, we expect a lot of stock-specific action and provide direction to domestic equities in the coming week. Apart from the index heavyweight Reliance, the banking sector is also likely to be in focus as ICICI Bank and Kotak Bank would announce results over the weekend.

Ajit Mishra, SVP - Technical Research, Religare Broking

Markets witnessed profit-taking on Friday and shed over a percent, tracking weak cues. After the initial gap-down opening, Nifty drifted gradually lower and finally settled at 19,745 levels. The decline was widespread wherein the IT pack faced the maximum heat, followed by FMCG and energy majors. Meanwhile, the broader indices traded mixed, capping damage to the market breadth.

We expect Nifty to spend some time around the current levels, to digest the recent surge and it would be healthy. Meanwhile, participants should focus more on risk management for the existing trades and prefer sectors that are showing resilience for fresh positions. Among the key sectors, banking and financials still looks promising for further upmove while the crack in the IT pack has delayed its reversal so plan accordingly.

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