Even an extended weekend was not enough to perk up the Indian market that saw extended selling for the fourth straight session on April 18 amid weak global cues, soaring inflation and disappointing numbers from heavyweights HDFC Bank and Infosys.
At close, the Sensex was down 1,172.19 points, or 2.01 percent at 57,166.74, and the Nifty was down 302 points, or 1.73 percent, at 17,173.70.
India's inflation based on the Wholesale Price Index (WPI) rose to a four-month high of 14.55 percent in March from 13.11 percent in February, according to data released by the commerce ministry on April 18.
Shares of Infosys plunged 9 percent, wiping out Rs 48,000 crore in market capital after several analysts cut its margin estimates over its weaker-than-expected earnings for the March quarter.
On April 13, the IT major reported a consolidated net profit of Rs 5,686 crore for the fourth quarter ended March 2022, registering an on-year growth of 12 percent. On a sequential basis, the profit declined 2 percent.
Shares of HDFC Bank fell nearly 5 percent despite the company on April 16 reporting a 23 percent year-on-year (YoY) growth in standalone net profit at Rs 10,055.2 crore for the quarter ended March 2022 as bad loans provisions declined 29 percent with further improvement in asset quality.
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"Indices opened gap down on the back of weak global cues as the Federal Reserve tightens policies to tame inflation. Benchmark indices never really recovered during the day from the twin blow of the IT index & the Bank Nifty with rising oil prices and inflationary pressures adding to the woes," said S Ranganathan, Head of Research at LKP Securities.
The broader markets did see buying interest in select pockets like defence, paper and fertilisers on the back of continued positive tailwinds, he added.
Infosys, HDFC, HDFC Bank, Tech Mahindra and Apollo Hospitals were among the top Nifty losers. NTPC, SBI Life Insurance, HDFC Life, Coal India and Tata Steel were the top gainers.
Among sectors, Nifty IT index fell 4.6 percent and Nifty Bank and PSU Bank indices were down 2 percent each. On the other hand, buying was seen in auto, energy and metal names.
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Stocks and sectors
On the BSE, IT index was down 4.7 percent and realty and bank over a percent each. However, power index added 2 percent and buying was also seen in the auto, FMCG and metal stocks.
The broader indices BSE midcap and smallcap did better than the benchmarks but still ended a percent lower each.
A long build-up was seen in Chambal Fertilisers and Chemicals, NTPC and Hindustan Aeronautics, while a short build-up was seen in the Infosys, Tata Power Company and Mphasis.
More than 200 stocks touched their 52-week high on the BSE, including Welspun Corp, NTPC, Chambal Fertilisers and Adani Green Energy.
Among individual stocks, a volume spike of more than 300 percent was seen in SBI Life, Mindtree and Mphasis.
Outlook for April 19
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Technically, the Nifty and the Sensex formed gapping down Doji candlestick, which suggests indecisiveness among the bulls and the bears.
After the sharp fall, the Nifty is trading near 200 and 50-day simple moving average (SMAs). We are of the view that the larger texture is still in to the bearish side and a fresh pullback rally is possible only after the Nifty goes past 17,200 and the Sensex 57,300.
Above the same, the pullback rally will likely continue to 17,300-17,375 and 57,600-57,900.
On the flip side, the 200-day SMA, or 17,150 and 57,150, will act as an immediate support for traders. Below the same, the Nifty can slip to 17,000-16,900 and the Sensex to 57,000-56,700.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The Nifty breached its short-term moving averages on April 18. It went on to breach the 200-DMA on an intraday basis but managed to recover towards the end of the session, thus holding on to the crucial moving average on a closing basis.
Over there the index formed a Doji pattern, which shows indecision in the minds of the market participants.
Overall structure shows that the short-term range for the index has shifted lower. The Nifty is expected to trade in the 17,000-17,500 range in the short term.
On the downside, 17,000 is a crucial support to watch out for. The index can form a base near 17,100-17,000 and attempt a recovery in the coming sessions as long as it holds the 17,000 level on a closing basis.
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