The broader markets underperformed the major indices with small and mid-cap indexes ending more than 3% lower.
Local markets experienced a downward attack on Friday amid weak global signals while adjusting to the hawkish stance taken by global central banks. The S&P BSE Sensex fell 889 points, or 1.54%, to 57,011 while the NSE Nifty 50 closed 263 points, or 1.53%, to settle at 16,985. The broader markets underperformed the major indices with small and mid-cap indexes ending more than 3% lower. IndusInd Bank ranked first in the Sensex slowdown, down 4.7%, closely followed by Kotak Mahindra Bank alongside Hindustan Unilever and Titan. Infosys was the biggest gainer, up 2.91%, accompanied by HCL Technologies, Power Grid and Sun Pharma.
Deepak Jasani, Head of Retail Research, HDFC Securities –
“From the 18604 peak, Nifty’s fall has been more severe than previous highs as two weeks of rally were canceled in just one week. This clearly demonstrates the increased selling behavior of institutional investors and savvy traders. The advance and decline ratio fell sharply to 435:1605 on the New York Stock Exchange on Friday Now Nifty is close to the previous support levels 16722-16891. On rebound, 17192 could act as resistance.On a weekly basis, Nifty is down 3%, forming a bearish Engulfing pattern and closing near the lowest level during the week.In the process, Nifty recorded Her second worst week in 10 months.”
Rohit Singri, Senior Technical Analyst at LKP Securities –
The index once again closed a negative week at 16985 with a loss of nearly three percent and formed a bearish candle on the weekly chart after two consecutive small bullish candles. The index broke through the strong support area of 17K and pulled back from that which indicates a cautious stance in the market, now the immediate elegance support is approaching near the 16900-16800 area if the mentioned levels are breached, we may see more pull down neatly and the resistance is coming near the area 17070-17180 So that we don’t maintain the strong hurdle area mentioned above, we may not see a strong buying move.”
Yesha Shah, Head of Equity Research, Samco Securities –
Bank Nifty closed the week on a negative note, as it encountered resistance around 37,300 levels after a short bounce. While there is no evidence of bullish momentum, Bank Nifty is trading at a crucial support level coinciding with the uptrend line. Previous resistance at 35600 now acts as a strong demand area and thus presents a good opportunity for risk and reward on the buy side. Even the benchmark Nifty indicator is consolidating around crucial price levels. Support and resistance for Bank Nifty are now placed at 35,500 and 37,500 respectively while support and resistance for Bank Nifty is now set at 16,900 and 17,600 respectively. Traders can maintain a neutral view and trade with tight stops below immediate support levels for long positions.”
Palak Kothari, Research Associate, Choice Brokerage –
On the technical front, the indicator formed an open bearish marabuzo candle on the weekly chart which indicates weakness on the counter. Moreover, the indicator gave a breakdown of the ascending trend line as well as trading below the 21 and 50-DMA adding bearish momentum for the next day. Stochastic momentum indicator is indicating a negative crossover on the daily time frame, which confirms a bearish movement for the upcoming session. At the moment, the index has support at 16900 levels while resistance comes at 17300 levels. On the other hand, Bank nifty enjoys support at 35300 levels while the resistance is at 36600 levels.”
Vinod Nair, Head of Research at Geojit Financial Services –
Weak global sentiment has drowned out domestic indices as markets digest the hawkish stance of international central banks amid escalating Omicron cases. As the European Central Bank took a small step back from crisis-era stimulus despite curbing borrowing costs next year, the Bank of England surprised markets by raising interest rates for the first time since the pandemic began. The continued sale of FII created tension among local investors. Except for IT, all sectors bled. “
Ajit Mishra, Vice President – Research, Religare Broking –
“Apart from the tightening of policy, the sharp rise in COVID cases globally has renewed participants’ concerns and we feel it could be exacerbated further in the absence of any significant positivity. On the index front, Nifty is likely to retest previous swing lows and the 16900-16700 region will be important. Participants should arrange their positions accordingly and prefer hedge bets.”
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