The Indian benchmark indices ended lower for the sixth day in a row on February 24 with Sensex falling 141.87 points or 0.24 percent to end at 59,463.93, and the Nifty closing at 17,465.80, down 45.50 points or 0.26 percent.
After a decent start, the market stayed positive for the first couple of hours; however, profit booking during the afternoon session erased all the early gains and extended sell-off, dragging the Nifty near 17,400 on the first trading session of the March series.
“The domestic market is broadly demonstrating a lack of confidence, registering its sixth consecutive day of losses despite global markets turning green. Continued selling in the domestic market by FIIs is acting as an overhang in sustaining the early gains,” said Vinod Nair, Head of Research at Geojit Financial Services.
“Crude oil prices rallied as the prospect of lower Russian exports outweighed rising US inventory," Nair added.
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Stocks and Sectors
Adani Enterprises, Hindalco Industries, M&M, JSW Steel and Tata Steel were among the biggest losers on the Nifty, while gainers included Divi's Laboratories, Adani Ports, Asian Paints, Coal India and Dr Reddy's Laboratories.
Among sectors, the Nifty metal index shed 3 percent, the auto index slipped by 0.87 percent and the PSU Bank index by 0.88 percent. However, the energy index was up 0.6 percent.
The BSE midcap and smallcap indices ended with minor losses.
On the BSE, the metal index shed 2.4 percent, the auto index slipped 1 percent while the capital goods and realty were down 0.7 percent each. However, some buying was seen in the oil & gas and healthcare indices.
More than 200 stock touched their 52-week low on the BSE. These included Macrotech Developers, Shreyas Shipping, Rolta India, Patel Engineering, Uflex, Visa Steel, UFO Moviez India, Zee Learn, Zee Media Corporation, Mercator, HT Media, Arvind, Adani Transmission and Adani Green Energy.
A short build-up was seen in Adani Enterprises, Hindalco Industries and Nalco, while a long build-up was seen in Gail India, GNFC and Dixon Technologies.
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Outlook for February 27
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities
The downward spiral continued amid a sharp bout of intra-day volatility as uncertainty surrounding the weak global economic scenario coupled with the probability of the US Fed maintaining a hawkish stance going ahead weighed on the sentiment.
The markets may continue to witness intermittent bearish spells as investors are likely to cut their long positions owing to multiple negative factors.
Technically, the Nifty has formed a long bearish candle on weekly charts which indicates further weakness from the current levels. However, with the market in oversold territory, we could see a quick pullback rally if the index trades above 17,500. Above this, the pullback formation is likely to continue till 17,600-17,750.
On the flip side, as long as the index is trading below 17,500, the weak sentiment will continue. Below this, the index could retest the level of the 200-day SMA or 17,400.
Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
The Nifty opened on a positive note; however, it could not sustain at higher levels and as the day progressed, it continued to drift lower to close the day on a negative note for the sixth consecutive day.
On the way down, the Nifty is trading around the crucial support trendline derived by joining a previous couple of swing lows. On the hourly charts, a positive divergence is developing and the hourly momentum indicator also has a positive crossover which indicates that a bounce is possible.
The bounce is likely to be temporary in nature and is unlikely to result in a trend reversal. The daily momentum indicator has a negative crossover which is a sell signal. Overall, the downtrend is still intact and any bounce should be used as an opportunity to create fresh short positions. We expect Nifty to target a level of 17,350 from a short-term perspective.
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