For the sixth session in a row, Indian stock markets ended lower as risk aversion returned to global equities markets. The S&P BSE Sensex declined 0.33% to 56,409, while the NSE Nifty 50 index fell 0.24% to 16,818.10. Since mid-February, both indices saw their worst losing stretch. During the seven-day selloff, the Sensex has corrected by more than 3,000 points.
In anticipation of the RBI’s interest rate announcement, which is expected for tomorrow, participants continued to wait and watch. According to analysts, the RBI may again seek an increase of 50 bps to lift the short-term lending rate (repo) to a three-year high of 5.9% after raising it by 140 basis points (bps) since May.
Asian Paints was the biggest loser in the Sensex pack today, falling 5.22%. Tech Mahindra, Titan, Kotak Mahindra Bank, Bajaj Finance, TCS, Wipro, and Bajaj Fins were the next worst performers.
In accordance with gains made overnight in US markets, Nifty opened the gap up, but continued to decline throughout the day. According to Deepak Jasani, Head of Retail Research at HDFC Securities, risk-off mood returned to the world’s equities and bond markets on Thursday as worries about inflation and the possibility of a global recession eclipsed the Bank of England’s decision to support the gilts market.
While 17026 continue to be a resistance, the Nifty has support in the range of 16653–16752.
While the energy index decreased by 0.8%, the Nifty IT index decreased by 0.9%. With the advance-decline ratio closing at a favourable 1.37:1, midcap and small cap indexes outperformed, advancing 0.31–0.63%.
According to National Stock Exchange data, foreign institutional investors have sold shares of equity valued close to 11,000 crore so far this week as of Wednesday.
“Markets have been attempting to recover. Thoughts are being dampened by persistent selling by overseas investors and dismal global cues. Up until the Nifty reclaims 17,200, we believe the overall tone will stay negative. A clear breach below 16,800 on the downside might accelerate the fall. Participants should maintain positions on both sides and align their positions accordingly, according to Ajit Mishra, vice president of research at Relegate Broking Ltd.
Technical Nifty Outlook
“In the future, 16800 will probably be a crucial help.
Any sustained decline below 16800 may result in market selling pressure. At 16640, there is support at the bottom end. 17050 are likely to continue to be a strong resistance on the higher end “LKP Securities Senior Technical Analyst Rupak De said.
Technical Research Analyst Nagaraj Shetti of HDFC Securities said, “The market might fall below the next important support, which is a 50% Fibonacci retracement drawn from the June bottom to September top, around 16650 levels if there is further weakening below 16800 levels. Any upward rise from here might run across significant resistance at levels around 17030.”