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Taking Stock | Market snaps three-day winning streak to sign off FY22 on a weak note

In FY22, which saw some giddy highs and desperate lows, the Nifty outperformed major global indices with returns of 19 percent

March 31, 2022 / 05:41 PM IST

The Indian equity benchmarks closed in the red on March 31, snapping a three-day winning streak as an eventful financial year 2021-22 drew to a close that saw the market scale new highs in October and then slide.

The 30-pack Sensex ended 115.48 points, or 0.2 percent lower, from the previous day’s close, while the Nifty was down 33.5 points, or 0.2 percent, at 17,464.75.

The year that was

Unlike the tame close on March 31, the financial year has been an eventful one for the Indian market as it witnessed to an unprecedented bull, rising to record highs in October.

The hawkish stance of the US Federal Reserve, an increase in crude prices, which rose to a 14-year high, and rising geopolitical tensions, however, turned the tide.

Close

The new year brought more turbulence as the Russia-Ukraine crisis worsened and lead to a full-scale war after the Russians invaded their western neighbour.

The India VIX, which indicates the degree of volatility traders expect over the next 30 days, rose as high as 32 percent on February 24, the day Russian invasion began, and Indian indices saw their biggest single-day fall of 2022.

Bruised and battered, the Nifty still managed to outperform most of the global markets in FY22, with returns of 19 percent during the year.

IndexPricesChangeChange%
Sensex54,326.391,534.16 +2.91%
Nifty 5016,266.15456.75 +2.89%
Nifty Bank34,276.40960.75 +2.88%
Nifty 50 16,266.15 456.75 (2.89%)
Fri, May 20, 2022
Biggest GainerPricesChangeChange%
Dr Reddys Labs4,249.10319.65 +8.13%
Biggest LoserPricesChangeChange%
Shree Cements22,001.20-215.15 -0.97%
Best SectorPricesChangeChange%
Nifty Metal5706.35230.10 +4.20%
Worst SectorPricesChangeChange%
Nifty IT28789.40437.25 +1.54%

The US’ S&P 500 and the UK’s FTSE 100 could manage returns of 16 percent and 13 percent, while the French CAC 40 appreciated by 11 percent and the tech-heavy NASDAQ rose by 9 percent.

Major Asian indices depreciated during the year, with Hong Kong’s Hang Seng seeing the biggest fall at 22 percent, China’s Shanghai index was down 16 percent, while Japan’s Nikkei lost 4 percent in FY22.

On March 31, the Sensex opened higher to reach the day’s high of 58,890.92 before negative global cues dragged it to the day’s low of 58,485.79.

The Nifty, too, opened in the green to make a high of 17,559.8 before paring gains to slip to the day’s low of 17,435.2.

“Indian markets opened on a positive note following mixed Asian market cues as China's latest manufacturing data released showed contraction,” said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers.

Traders were worried as India Ratings and Research (Ind-Ra) lowered India’s Gross Domestic Product (GDP) growth forecast to 7-7.2 percent for FY23, from 7.6 percent, citing rising uncertainty over Russia-Ukraine war and the resultant dampening of consumer sentiment, he added.

The International Monetary Fund, however, provided a silver lining. It said India, which received record foreign direct investment during the last few years despite COVID-19 crisis, had quite a few safeguards in place to mitigate the risks from capital flows.

Stocks & Sectors

FMCG and media stocks were the best performers, as the Nifty FMCG index gained the most at 1.2 percent and Nifty Media 0.81 percent.

Nifty realty and auto also made marginal gains while pharma and IT were the top losers among sectoral indices.

Broader markets had a better day, with the Nifty midcap and smallcap outperforming the benchmarks. The BSE midcap gained 0.29 percent and BSE smallcap 0.31 percent higher.

Hindalco, Divis Labs, Wipro, Reliance and Dr Reddy’s Labs were among the top Nifty losers, down 1.35 to 5 percent.

Among the major gainers, JSW Steel, Britannia, M&M, HUL and Tata Consumer Products were up between 1.5 and 2.1 percent.

Long build-up was seen in Hindustan Aeronautics, Tata Communications and NALCO, while short build-up was witnessed in Handalco, Vodafone Idea and Strides Pharma.

Outlook for April 1

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

The Nifty opened on a positive note on March 31 but couldn’t continue with its winning streak of the last three sessions.

For the last couple of sessions, the index has been hovering near the crucial barrier of 17,500. Failure to sustain above this crucial hurdle suggests that the index can consolidate further in the 17,000-17,500 range in the short term.

The hourly chart shows that the Nifty has broken down from a rising channel and the breakdown is accompanied by a bearish hourly momentum indicator.

The index is expected to fill up a gap area of 17,387-17,343 on the daily chart. Short-term traders can consider booking profit at this level and wait for a minor degree dip to initiate a fresh long position.

Shrikant Chouhan, Head, Equity Research (Retail), Kotak Securities Ltd

Investors followed global market cues, which were mostly weak as most of them had rallied in the last few sessions on a fall in crude oil prices and expectations of some solution to the Russia-Ukraine war.

After seeing sharp gyration during the week, investors exercised caution with a negative bias on the expiry day.

Technically, after a promising uptrend move, the Nifty is witnessing a narrow range activity and formed a small bearish candle near the important resistance level. However, the short-term texture of the market is still on the positive side.

For positional traders, 17,400 and 17,350 would act as key supports. Above the same, the index could touch 17,600-17,675. The uptrend, however, would be vulnerable below 17,350.

Ajit Mishra, VP-Research, Religare Broking Ltd

Markets took a breather on a monthly expiry day and ended the last day of the financial year on a flat note.

Mixed global cues triggered a flat opening, followed by range bound move. Sectoral indices traded mixed as healthy buying in FMCG, auto, and realty supported indices.

Profit booking in pharma, IT and PSU banks, however, capped the upside. The Nifty ended down 0.2 percent to close at 17,464.75

We reiterate our positive yet cautious stance on lingering tensions between Russia and Ukraine and their impact on global markets. Markets are offering opportunities across sectors, so the focus should be on identifying sectors and themes that are gaining traction.

Disclaimer: The views and investment tips of investment 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 taking any investment decisions.

Disclosure: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.



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Gaurav Sharma
first published: Mar 31, 2022 05:09 pm
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