After opening on a strong note, the Indian indices ended the volatile day in the red as recessionary fears after US Fed’s meeting returned to haunt markets.
At close, the 30-pack BSE Sensex was down 304 points or 0.5 percent at 60,353 while the Nifty lost 51 points or 0.3 percent to close the day under 18,000 at 17,992.
The markets opened on a solid note in the morning, following a strong close of the US markets as well as largely positive cues from other Asian players. However, volatility gripped the markets on weekly expiry and weak opening in European markets added to the negative sentiments.
The US Fed in its meeting yesterday indicated strongly that the interest rates would remain elevated for longer than anticipated earlier. Though the hike announced of 50 bps was already priced in, market participants were looking for hints about the possible pause in interest rate hikes. Unfortunately, they couldn’t find anything positive in the details released by the US Fed.
“Globally, investors are digesting the FOMC minutes with stock markets trading lower revealing that the Fed officials' are determined to tame inflation by maintaining its aggressive stance”, said Vinod Nair, Head of Research, Geojit Financial Services.
The Banking & Financials along with the IT were the top drags of the day with Banks losing close to one percent and IT losing half a percent in today’s session.
FMCG, Auto and Pharma were the top gainers and each was up by one percent while Metals were up 0.8 percent.
Hero MotoCorp, Cipla, NTPC, ITC and JSW Steel were the top gainers on the Nifty, with each gaining between 2.0 to 2.1 percent.
Among the top losers, the Bajaj twins lost more than 5 percent today with Bajaj Finance losing the most at 7.2 percent while Bajaj Finserv was down 5.1 percent. ICICI Bank, Titan Company and Infosys were the other top losers with losses ranging between 1.3 to 2.2 percent.
Stocks and sectors
On the BSE, the BSE Oil & Gas Index gained the most by 1.6 percent and was followed by BSE FMCG (+1.36 percent) and BSE Energy (+1.28 percent). BSE Metals and BSE Auto also edged higher by one percent each.
BSE Financial Services was the top loser with a loss of one percent while BSE Bankex BSE Private Bank Index was down 0.8 percent each. The BSE IT index lost 0.6 percent today.
Trends were mixed in the broader markets with BSE Midcap gaining 0.3 percent while BSE Smallcap ended on a flat note.
A long build-up could be seen in Apollo Tyres, BHEL and MRF while a short build-up was witnessed in Bajaj Finance, Bajaj Finserv and Cholamandalam Finance.
Among specific stocks, a volume spike of more than 600 percent was seen in Balakrishna Industries, while the volumes in Bajaj Finance and Bajaj Finserv surged close to 500 percent each.
Outlook for January 6
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd
Valuations of Indian markets are still stretched when compared to other global indices and investors are steadily booking profit to trim their positions due to the challenging and uncertain global environment. Investors are guarded in their equity exposure, as rising interest rate regime and geo-political tensions are key hurdles that could trigger a major sell-off.
Ajit Mishra, VP - Technical Research, Religare Broking Ltd.
Markets have been drifting lower amid mixed signals from the global front however the pace of decline is gradual, thanks to rotational buying in select index majors from across sectors. Technically, Nifty has retested the crucial support of medium term moving average i.e. 100 EMA on the daily chart and indications are pointing toward the negative bias to continue. Amid all, we recommend continuing with stock-specific approach while keeping a check on the position size.
Rupak De, Senior Technical Analyst at LKP Securities.
Nitfy remained volatile before ending below the psychological 18000 mark. The market continued to remain under the bears' control as the benchmark Nifty corrected for the second consecutive day.
The daily momentum indicator is in bearish crossover, suggesting weak price momentum for the near term. The volatility may continue over the short term, with a predominant weakness. On the lower end, support is visible at 17800. On the higher end, resistance is visible at 18250, above which a bullish reversal may happen.
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