Taking Stock | Market falls for 5th straight day as rate-hike worries persist

Stock Market Today:

Indian equity markets extended their losing streak to the fifth straight session, spooked by hawkish comments from the Reserve Bank of India's Monetary Policy Committee as well as the US Federal Reserve's Open Market Committee.

The Sensex closed 139.18 points or 0.23 percent lower at 59,605.80. The Nifty ended 43 points lower at 17,511.30. About 1,540 shares advanced, 1,810 declined and 148 were unchanged.

Among sectors, power and realty were the biggest losers, shedding over a percent each. While metals, PSU Banks and fast-moving consumer goods companies saw some buying.

"The equity market traded cautiously between gains and losses as the minutes of the central bank policy meeting revealed concerns over high inflation and its commitment to bring inflation under control," said Vinod Nair, Head of Research at Geojit Financial Services.

"In response to the heightened fears of rate hikes, the US 10 yr treasury yield continued to stay high, near 4 percent. Additionally, the dollar index rose as the greenback cheered over hawkish Fed comments and rising geopolitical tensions."

Sectors and stocks 

Barring the Nifty Media, which fell 1.77 percent on a sharp drop in Zee Entertainment, none of the sectoral indices saw large movements. Zee Entertainment slumped more than 3 percent after the company was admitted for insolvency, which may delay the merger with Sony.

Among Nifty stocks, Hindalco Industries and Coal India were the biggest gainers. They were followed by Axis Bank, JSW Steel and Tata Motors. The biggest losers of the day were Asian Paints, L&T and Titan.

Broader market indices the Nifty midcap 100 and smallcap 100 closed flat with a negative bias. The Nifty Next 50 underperformed the benchmark and closed about half a percent lower.

Outlook for Feb 24

Rupak De, Senior Technical Analyst at LKP Securities

The benchmark Nifty remained volatile on the last day of February's F&O expiry. During the day, Nifty managed to hold above the morning low of 17455.

Going ahead, the low of 17,455 is likely to act as immediate support for the falling Nifty. A decisive fall below 17,450 can take the index to 17,200–17,150. But if the index holds the level, it can recovery towards 17750–17850, where the upper band of the falling channel lies.

Ajit Mishra, VP - Technical Research, Religare Broking Ltd

The pressure was widespread as a continuous decline in the banking heavyweights combined with a dip in the IT and energy majors weighed on the sentiment. In line with the trend, the broader indices too shed over a percent each.

The pace of decline was gradual till February 21 but a sharp cut in the US markets changed the tone. Indications are that the trend will continue, with the next major support at around the 17,250-17,400. In case of a rebound, the 17,700-17,900 will act as a strong hurdle. Traders should continue with a “sell on rise” approach and limit positions.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities

A small negative candle was formed on the daily chart, which indicates the formation of a high-wave candle. Normally, such a pattern is formed after a reasonable downward correction signal possible upside bounce. The Nifty is placed near the crucial support of 17400-17300 and recovered decently on the upside in the recent past

The support of 200-day EMA has been instrumental in important trend reversals in the past. The downside violation of this moving average support at 17,590 levels signals a higher possibility of a sizable upside bounce in the market from the said lower supports for the short term. Immediate resistance is at 17,650 levels.