The Indian equity benchmarks ended lower for the third straight day on March 25 after yet another volatile session as the Ukraine-Russia war, rise in domestic fuel prices and mixed Asian cues weighed on sentiment
Widespread selling across sectors saw the 30-pack Sensex end the day 233.48 points, or 0.41 percent, down at 57,362.2, while the Nifty lost 69.75 points, or 0.41 percent, to close at 17,152
“A prolonged geopolitical situation and elevated prices will gradually start weighing on demand and profitability, and can lead to a cut in growth and earnings estimates. Also, the recent rise in bond yields can have implications for flows and equity valuations,” said Milind Muchhala, Executive Director, Julius Baer.
The Indian market reacted positively to global cues in the morning, as the Sensex opened 206 points higher and touched the day’s high of 57,845.37. The mood, however, soon turned bearish and the index dived 745 points from the day’s high to the day’s low of 57,100.24 in the afternoon session before narrowing losses in the final hours.
The Nifty opened 66.25 points higher and touched the day’s high of 17,295 before slipping 218.35 points to a low of 17,076.55.
“After the recent 10 percent rally, the market has turned sideways with a negative bias due to increase in commodity prices, tightening monetary policy and inflationary pressure,” Vinod Nair, Head of Research at Geojit Financial Services. said.
The domestic market is showing strong resilience but to sustain the trend a lot will depend on the outcome of the Ukraine war and commodity prices, he added.
“Ease in Covid restrictions in India is a boost for sectors like hospitality, multiplex, transportation, etc, leading to the outperformance,” Nair said.
Stocks & Sectors
The Nifty realty was the major gainer, up 1.22 percent. Even though it was under pressure for teh most part of the day, late buying in realty stocks pushed the index higher just before the close.
Nifty media and metals ended the day with marginal gains of 0.04 and 0.03 percent each.
The Nifty IT was the biggest loser, down a percent, followed by pharma and FMCG sectors, which shed 0.86 and 0.77 percent each.
The broader markets mirrored the benchmarks. The BSE midcap was down 0.36 and smallcap 0.33 percent.
Bajaj Auto, Adani Ports, JSW Steel, Dr Reddy’s Labs and SBI were the top gainers on the Nifty, gaining between 0.74 and 1.97 percent.
On the losing side, Titan Company, Tech Mahindra, Maruti Suzuki, Cipla and IOC were down between 1.49 and 3.61 percent.
Long build-up was seen in Container Corp, Indigo Paints and Indian Hotels, while short build-up was witnessed in Indus Tower, Escorts and Muthoot Finance.
Outlook for the next week
Siddhartha Khemka, Head-Retail Research, Motilal Oswal Financial Services Ltd
Domestic equities witnessed another day of range-bound session in the absence of directional cues. The rise in retail fuel prices added to the overall cautious sentiments.
The Nifty opened positive but pared early gains to close 0.4 percent lower at 17,153. The broader market, too, ended lower.
Global equities were mixed. While the US closed positive, Asian markets were negative, with weakness seen in tech stocks. European markets were flat, disappointed by UK retail sales data.
Domestic equities were stuck in a tight range for the sixth consecutive day, with the Nifty moving within the 17,100-17,300 band for the most part of the week.
Markets were unable to sustain at higher levels as selling pressure emerged around 17,350-17,400. A strong close above this level can take the Nifty t 17,600-17,750 zone.
In the broader market, leisure and tourism segment is witnessing a lot of interest after the government removed most of the Covid-19 restrictions. Stocks in the multiplex, hotels, travel as well as entertainment space are likely to do well.
Ajit Mishra, VP-Research, Religare Broking Ltd
Markets traded dull for yet another session and ended marginally lower, extending the prevailing consolidation phase.
Firm global cues triggered an uptick in the initial trade but profit-taking in index majors across sectors pushed the benchmark lower as the day progressed.
Mixed global cues combined with erratic swings in crude are causing discomfort to participants and it might linger in the coming week as well.
On the index front, the Nifty has been hovering within a narrow range of 17,000-17,350 and either side break would trigger the next move.
Participants should focus on sectors and stocks which are performing well, while concentrating more on overnight risk management.
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