Indian equity benchmarks ended lower for the second consecutive day on January 7, dragged by losses in shares of select banking, FMCG and IT heavyweights such as Infosys, Hindustan Unilever, ICICI Bank, ITC and Kotak Mahindra Bank.
Market barometer Sensex opened in the green and traded with gains for the most part of the day. However, in the fag end, it succumbed to bears as investors took money off the table at higher levels.
Sensex closed 81 points, or 0.17 percent, down at 48,093.32 and Nifty closed 9 points, or 0.06 percent, down at 14,137.35.
Mid and small-caps outperformed their larger peers as the BSE Midcap and Smallcap indices closed 1.05 and 0.85 percent higher, respectively.
"After the Democrats won the Georgia Senate, global cues were positive in the morning trade. Afternoon trade, however, did see profit-taking in FMCG stocks. Despite that, we saw a close above 48K led by financials & metals. The broader markets witnessed the demand for housing finance, realty and liquor stocks," said S Ranganathan, Head of Research at LKP Securities.
Analysts believe that the market will be guided by the quarterly earnings and global cues in the coming days.
"We believe Q3 earnings and global cues would provide further direction to the markets. To start with, the Q3FY21 result of IT major TCS would be on participants’ radar. Traders should maintain extra caution in the selection of stocks now and focus on overnight risk management," said Ajit Mishra, VP - Research, Religare Broking.
The rupee dived 20 paise to settle at 73.31 (provisional) against the US dollar on January 7, tracking muted domestic equities and a rebound in the American currency.
The domestic unit opened flat at 73.10 against the greenback. It swung between a low of 73.31 and a high of 73.08 during the session. It finally settled at 73.31, down 20 paise against its previous close.
Sectors & stocks
With a gain of 3.75 percent, shares of Bharti Airtel closed as the top gainer in the Sensex kitty of stocks. It was followed by IndusInd Bank, Axis Bank and Bajaj Finserv that rose up to 3 percent.
Among the sectors, BSE Metal stole the limelight, jumping 3.70 percent, followed by BSE Telecom which rose 3 percent.
BSE Realty, capital goods, industrials and basic materials indices closed over a percent higher each. On the flip side, BSE FMCG, IT and power ended about a percent lower.
Some 450 stocks, including Asian Paints, HDFC, ICICI Bank and UltraTech Cement, hit their fresh 52-week highs on BSE.
More than 560 stocks, including Intellect Design Arena, Welspun India, Jaiprakash Associates, Satin Creditcare Network and Majesco, hit their upper circuits on BSE.
The stock of Bharat Forge witnessed a volume spike of over 500 percent while TVS Motor and Adani Enterprises saw a volume spike of over 200 percent each.
The stocks of Adani Ports, Piramal Enterprises and Bosch saw a volume spike of over 100 percent each.
IDFC First Bank, Bharat Forge and Shriram Transport Finance Company were among the stocks that witnessed long build-up. ICICI Lombard General Insurance Company, Hindustan Unilever and HDFC Life Insurance were among those who witnessed short build-up.
Technical view
Nifty opened the day with a good gap but again failed to hold the gains for the second consecutive day, witnessing profit-booking. It closes on a negative note at 14,137 with nominal loss.
"The index has formed a good base near the 14,100-14,000 zone. Holding above the said level, one can hold longs but any break below 14,000 can result in more profit-booking and we may see a dip towards 13,800. A strong hurdle for Nifty is near 14,250 and a fresh upside is possible only above 14,250," said Rohit Singre, Senior Technical Analyst at LKP Securities.
Manish Hathiramani, Proprietary Index Trader and Technical Analyst at Deen Dayal Investments, is of the view that the level of 14,250 has proved to be a stiff resistance point as we have visited around that price point twice.
"If we can get past that, we should see the markets at 14,350-14,400. A buy on dips strategy would be the best way to approach the Nifty. However, caution is suggested and it is imperative stops are placed by traders at regular intervals," said Hathiramani.
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