The inclusion of Indian bonds in the JP Morgan index failed to cheer the bulls as benchmark indices dropped for another session extending the losses to a fourth straight day on September 22.
Earlier in the day, JPMorgan announced India's inclusion in its Government Bond Index-Emerging Markets (GBI-EM) global index suite with effect from June 2024. This is likely to bring a huge amount of liquidity to the Indian market and make raising funds cheaper for corporates.
The Sensex ended 221.09 points or 0.33 percent lower at 66,009.15 and the Nifty was down 68 points or 0.34 percent at 19,674.30. Market breadth also favoured declines as about 1,747 shares rose, 1,779 shares fell and 143 were unchanged.
“While Indian market valuations have become expensive, other bigger concerns like rising crude oil prices, firm US Dollar index and treasury yields coupled with continuous FII selling have been denting the sentiment,” said Amol Athawale, Vice President - Technical Research, Kotak Securities Ltd.
Stocks and sectors
Broader market indices were mixed. Nifty Smallcap 100 added 0.26 percent but Nifty Midcap 100 declined 0.11 percent. BSE 500, the broadest index on NSE, fell 0.25 percent as well.
Barring Nifty PSU Bank and Nifty Auto, which rose 3.51 percent and 0.21 percent, respectively, all sectoral indices closed in the red. Nifty Healthcare was the biggest loser, down 1.59 percent followed by the Nifty Pharma index.
Among the Nifty 50 stocks, IndusInd Bank was the top gainer (up 2.86 percent) followed by Maruti Suzuki, which rose on positive brokerage notes. SBI, M&M and Asian Paints were other top gainers.
Wipro was the biggest loser (down 2.44 percent) following the resignation of its Chief Financial Officer Jatin Dalal. Dr Reddy’s Labs, UPL Cipla and Bajaj Auto were other top losers of the day.
Outlook for September 25
Deepak Jasani, Head of Retail Research, HDFC Securities
Nifty fell on Sept 22 but showed signs of near-term bottom formation. On weekly charts, Nifty fell 2.57 percent, the sharpest fall since the week ended February 20. A fall below 19,645 could take the Nifty to the 19,460-19,480 band, while an upmove could see the index face resistance at 19,849 in the near term.
Rupak De, Senior Technical analyst at LKP Securities.
Nifty experienced consistent selling pressure throughout the week, resulting in a decline of 2.8 percent from its all-time high. This recent correction has caused it to dip below the critical 21-day Exponential Moving Average (21 EMA). The sentiment appears bearish at this point, with a key support level identified at 19,600. A breach below 19,600 could potentially initiate a more significant market correction. On the upside 19,800 is expected to serve as a resistance level.
Ajit Mishra, SVP - Technical Research, Religare Broking Ltd.
Feeble global cues combined with pressure on select heavyweights are weighing on the sentiment. Going ahead, recovery in the banking and financial majors would be critical for any meaningful rebound else the corrective tone would continue. We feel it is prudent to restrict aggressive positions until the market stabilizes.
Vinod Nair, Head of Research at Geojit Financial Services.
Domestic markets closed on a sombre note as mixed cues from US and Asian markets weakened domestic investors’ confidence. Nevertheless, PSU bank stocks outperformed as India's inclusion in JP Morgan's Government Bond Index led to a decline in bond yields. On a broad basis, risk-averse sentiment prevailed due to the ongoing ascent of US bond yields and concern over higher rates for a prolonged period.
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