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Taking Stock | Sensex down 196 points, Nifty below 17,000; consumer durables and FMCG gain

Markets will first react to the GDP numbers in the early trade on December 1 even as auto sale numbers will also start pouring in, say experts

November 30, 2021 / 05:41 PM IST
Sensex | Representative image

Sensex | Representative image

Indian equity benchmarks ended lower amid volatility on November 30 as concerns over the Omicron variant of the coronavirus weighed on the market even as IT and healthcare stocks defied the trend to trade higher.

The Sensex fell 1,119 points from the day's high and the Nifty slipped below the psychologically vital 17,000-mark as the market awaited gross domestic product data (GDP) for the second quarter.

The Sensex ended the day 195.71 points, or 0.34 percent, lower from the previous day’s close at 57,064.87, while the Nifty closed 70.75 points, or 0.41 percent, down at 16,983.20.

Selling pressure was visible in the BSE metals index, however, BSE consumer durables and FMCG indices showed some strength.

The 30-pack Sensex opened marginally up but quickly followed global cues to race 911.69 points to make the day’s high of 58,183.77.  The Nifty started off flat and touched the day’s high of 17,324.65

Close

The market turned choppy following Moderna CEO’s comments that vaccines may not be effective against the Omicron strain.

“Tracking positive closure of the US and European markets, domestic indices started the session on a strong footing following the US President’s announcement ensuring that economic lockdowns are currently off the table,” said Vinod Nair, Head of Research at Geojit Financial Services.

However, the optimism was quickly substituted with a sudden selloff as global equities slipped into negative territory following experts’ advice to be cautious, he added.

IndexPricesChangeChange%
Sensex60,754.86-554.05 -0.90%
Nifty 5018,113.05-195.05 -1.07%
Nifty Bank38,210.30-5.85 -0.02%
Nifty 50 18,113.05 -195.05 (-1.07%)
Tue, Jan 18, 2022
Biggest GainerPricesChangeChange%
Axis Bank725.2012.55 +1.76%
Biggest LoserPricesChangeChange%
TATA Cons. Prod731.45-33.65 -4.40%
Best SectorPricesChangeChange%
Nifty Bank38210.30-5.85 -0.02%
Worst SectorPricesChangeChange%
Nifty Auto11598.75-282.55 -2.38%

"In a highly volatile trading day, the street began on a very positive note on expectations of record GST (goods and services tax) numbers for November in line with the trends shown by e-way bills. However, post the views of Moderna CEO on the Omicron variant, markets witnessed selling pressure,” LKP Securities head of research S Ranganathan said.

While key data points for November like the auto numbers were seen playing out, profit-booking by FPI kept investors watchful, he added.

“Defying the market trend, IT and healthcare stocks along with mid and small caps traded with gains,” Nair said.

“The smallcap 100 index was seen buzzing around through the day on the back of the MSCI Semi-Annual review,” Ranganathan said.

Stocks and sectors

On the sectoral front, Nifty IT and FMCG ended in the green but Nifty metals & commodities closed lower.

Power Grid, SBI Life, Bajaj Finserv, Shree Cements and Titan were among the top Nifty gainers. Tata Steel, Kotak Mahindra Bank, Adani Port and JSW Steel were among the top losers.

Shares of Go Fashion, the operator of Go Colors brand, closed 81.5 percent higher on the listing day. The stock opened at Rs 1,316 on the BSE, a 90.7 percent premium over the issue price of Rs 690, and closed at Rs 1,252.60. On the NSE, it closed 81.70 percent higher at Rs 1,253.70.

India VIX was up by 1.62 percent from 20.83 to 21.16 levels.

Volatility had spiked to a multi-month high, signalling wild swings and underperformance in the market, said Chandan Taparia, Vice President, Analyst-Derivatives, at Motilal Oswal Financial Services.

On the options front, maximum Call open interest was seen at 18,000 then 19,000 strike, while maximum Put open interest was seen at 17,000 then 16,000 strike. “Option data suggests a wider trading range in between 16,500 to 17,500 zones,” Taparia said.

Technical View

The Nifty formed a Bearish inverted hammer kind of candle with long upper shadow on the daily scale, which indicates that follow-up activity was missing and every bounce was being sold.

“Now till it holds below 17,200 zone, the bounce could be sold and weakness may be seen towards 16,800 and 16,500 zones, whereas medium-term hurdles can be seen at 17,350 and 17,500 zones,” Taparia said.

On the daily chart, the index formed a bearish candle, suggesting weakness for the next trading sessions.

The index has given closing below 21 and 9-day moving average, which points out that bears are active. Daily momentum indicator MACD and Stochastic traded with a negative crossover, which suggests bearish movement in the upcoming session, said Palak Kothari, Research Associate, Choice Broking.

Outlook for December 1

For the Nifty, immediate support is at 16,800 and breach of it can see the index slip to 16,600-16,500 levels, while resistance is at 17,350.

The Bank Nifty has support at 35,300 and resistance at 37,000, Kothari said.

“Markets will first react to the GDP numbers in early trade on Wednesday and the auto sales will also start pouring in from December 1,” said Ajit Mishra, VP-Research, Religare Broking Ltd.

The news flow around the new coronavirus variant would keep the volatility high. “Keeping in mind the scenario, it’s prudent to continue with hedged positions until the markets stabilise,” Mishra said.
Gaurav Sharma
first published: Nov 30, 2021 05:39 pm

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