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Taking Stock | Sensex slips 191 points, Nifty manages to hold 17,000; IT stocks buck the trend

Muted global markets and continued FII selling coupled with rising Omicron active cases dragged the benchmark indices lower.

December 24, 2021 / 06:23 PM IST
Broader markets also lost ground today with BSE Midcap losing by 1.15 percent and BSE Smallcap was down 0.6 percent.

Broader markets also lost ground today with BSE Midcap losing by 1.15 percent and BSE Smallcap was down 0.6 percent.

Indian markets ended Friday's session on a negative note after three days of gains as the volatility crept in today with India recording more than double cases of Omicron compared to last week. The markets ignored the positive cues from Asian peers as all sectoral indices except IT witnessed selling pressure and closed in the red.

The 30-pack Sensex opened higher in the morning on positive global cues to claim a day’s high of 57,624 but soon pared gains as the sentiments turned negative and made an intra-day low of 56,813. At close, Sensex stood at 57,124, down 191 points or 0.33 percent.

The NSE's Nifty opened with a gain of 77 points and made an intra-day high of 17,150 but breached the 17,000 level to make an intra-day low of 16,909. It closed the day 74.5 points or 0.4 percent lower at 17,004.

“Nifty index opened positive at 17,150 zones but it could not sustain at higher levels and drifted towards 16,900 zones”, said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.

“Weighed by muted global markets and continued FII selling, domestic indices erased its mid-day gains to slip into the red led by selling pressure in index heavyweights”, said Vinod Nair, Head of Research at Geojit Financial Services.

Close

Nifty took support at lower zones led by buying in a few heavyweights and IT counters but it failed to enter the positive territory and fell back below the 17,000-mark.

The markets remain highly volatile amid rising omicron cases, higher monetary policies, and inflationary woes, Nair added.

India VIX, which indicates the degree of volatility traders expect over the next 30 days, moved up 2.07% from 15.82 to 16.14 levels. “Volatility needs to cool down to 15-14 zones for stability in the market”, said Taparia.

IndexPricesChangeChange%
Sensex60,098.82-656.04 -1.08%
Nifty 5017,938.40-174.65 -0.96%
Nifty Bank38,041.35-168.95 -0.44%
Nifty 50 17,938.40 -174.65 (-0.96%)
Wed, Jan 19, 2022
Biggest GainerPricesChangeChange%
ONGC170.256.40 +3.91%
Biggest LoserPricesChangeChange%
Infosys1,867.05-53.70 -2.80%
Best SectorPricesChangeChange%
Nifty PSU Bank2801.6560.45 +2.21%
Worst SectorPricesChangeChange%
Nifty IT37281.70-810.10 -2.13%

Grasim Industries, NTPC, M&M, Eicher Motors, and IOCL were the top Nifty losers, falling between 1.7 to 2.9 percent.

Top gainers on the Nifty included HCL Technologies, Tech Mahindra, SBI Life Insurance, Wipro, and Asian Paints which gained between 0.5 to 3 percent during the day.

Stocks & Sectors

PSU Banks, Reallty and Pharma were down more than 1 percent while Auto and financial services were the other top losers which lost more than 0.9 percent. IT was the lone survivor which gained 1.09 percent.

Broader markets also lost ground today with BSE Midcap losing by 1.15 percent and BSE Smallcap was down 0.6 percent.

Among individual stocks, a volume spike of more than 200 percent was seen in Grasim Industries, Dalmia Bharat and Vodafone Idea. A long build-up was seen in Firstsource Solution, Motherson Sumi, and HCL Technologies, while there was a short build-up in Grasim Industries, Petronet LNG, and L&T Financial.

There were 7 advances on the BSE compared to 23 declines.

Technical View

“Nifty formed a bearish candle on a daily scale and closed with losses of around 70 points. It negated its higher lows but has been forming higher highs from last four trading sessions”, said Taparia.

It formed a Bullish candle on the weekly scale with a long lower shadow indicating buying was seen at declines but hurdles are intact at higher zones. “Now it has to hold above 17,000 zones, for an up move towards 17,200 and 17,350 zones whereas support can be seen at 16,900 and 16,800 zones”, he added.

Outlook for December 27

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd

Markets started the week with correction amid concerns of rising Omicron variant cases and increasing hawkishness from global central banks.

In line with global markets, the domestic markets recovered some losses during the week. BSE Sensex and Nifty 50 ended the week almost flat.

While the US 10-year treasury yield remained broadly stable, oil prices have again started to move higher.

So far this month, FII continues to be a net seller in the Indian market. Apart from inflation and global Central Bank announcements, global and domestic markets will continue to keep track of the Omicron variant spread.

Mr. Ajit Mishra, VP - Research, Religare Broking Ltd

Markets traded volatile and ended with a cut of nearly half a percent, taking a breather after the recent up move.

Favourable global cues led to a firm start but profit-taking at the higher levels trimmed all the gains in no time and pushed the benchmark lower.

Though buying in IT and FMCG trimmed losses in the middle, the pressure in the IT pack capped the upside. Finally, the Nifty ended lower by 0.4% to close at 17,003 levels. The broader markets too ended with losses in the range of 0.5-1%.

Markets are closely eyeing the COVID situation and any positive news could only help the index to make any sustainable up move else volatility will continue.

Interestingly, we’re seeing a mixed trend across sectors so traders should focus on IT, select FMCG, pharma for long trades while the banking pack may continue to trade subdued.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas

The Nifty, in the week gone by, found support near the junction of the 40 WEMA & the weekly lower Bollinger Band & witnessed a decent recovery. In the last session of the week, however, it saw some profit booking.

The Nifty opened gap up on December 24 only to face selling pressure at a higher level. It tested the hourly upper Bollinger Band & the 20 DMA, which attracted a fresh round of selling. As a result, the index has formed a bearish outside bar along with an Engulfing bear candle on the daily chart. Thus today’s high of 17,155 becomes a crucial resistance.

Structurally, the recent bounce looks matured at 17,155 & the Nifty can slide down towards its daily lower Bollinger Band, which is near 16,700. Overall, short-term consolidation is expected in the range of 17,155-16,700.
Gaurav Sharma
first published: Dec 24, 2021 04:47 pm

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