Indian equity markets ended on a negative note for the second straight day. The BSE Sensex declined 564 points, or 0.94 per cent, to end at 59,610 while the NSE Nifty 50 shut shop at 17,808, down 150 points or 0.83 per cent. Nifty Bank index tanked 435 points or 1.14% to end at 37,632.80. The BSE MidCap and SmallCap indices advanced about 0.4 per cent each. Sectorally, the Nifty PSU Bank and Metal indices were the only gainers, rising 2 per cent and 1.3 per cent, respectively. Meanwhile, the Nifty Financial Services and IT indices slipped 1.6 per cent each. The short term trend of Nifty seems to have reversed down, according to analysts. RBI monetary policy outcome, news flow from Ukraine is likely to set the direction for domestic equities in coming sessions.
What dragged markets today?
“Weaker global cues led to some weakness in the domestic market, as the investors’ sentiments turned cautious after the more hawkish tone by the US FED. With this development, a sharp movement was seen in US10-year bond yields, which have crossed 2.6% levels. Since the last MPC, several factors such as geopolitics, oil and commodity prices, bond yields, and inflation expectations have been altered,” said said Neeraj Chadawar, Head – Quantitative Equity Research, Axis Securities.
“Given the rising commodity prices are pushing the inflation expectation on a higher side, the RBI’s stance remains critical at this point. The accommodative stance by RBI in the upcoming MPC needs to be watched out for. Earnings season is around the corner and Q4FY22 earnings commentaries remain critical at this juncture, and that will drive the market fundamentals moving forward,” he added.
Ajit Mishra, VP – Research, Religare Broking Ltd.
“Markets inched lower for the second consecutive session and lost nearly a percent. The global developments have once again taken center stage for the markets and the updates on Russia-Ukraine would remain on investors’ radar. On the domestic front, investors would keep a close watch on the RBI monetary policy meet the outcome on the 8th of April. We expect volatility to remain high, thanks to weekly expiry. However, we’re still seeing select pockets like power, fertilizers, and OMCs doing well so participants should align their positions accordingly. On the index front, we expect the Nifty to hold 17,700 levels.”
Mohit Nigam, Head – PMS, Hem Securities
“Indian equity benchmarks extended their previous session’s losses with gap-down opening on Wednesday tracking weak global cues. Investors booked profits in banking stocks after recent sharp gains. On technical front, Nifty50 may take immediate support and resistance on 17,650 levels and 18,050 level respectively. For Bank Nifty, 37,200 and 38,150 levels may act as immediate support and resistance respectively.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd
“Traders rushed to trim their position further in banking and IT stocks, thus pulling down key benchmark indices sharply lower. Weakness in other global markets and concerns of hawkish US Fed likely to hike interest rates along with caution ahead of RBI’s policy meet prompted investors to turn risk averse. The intraday texture of the market has turned weak and a fresh pullback rally is possible only after 17900 breakout. For traders, 17,900 would act as an immediate hurdle, and below the same a weak formation is likely to continue till 17700-17650. However, above 17900 the index could move up to 17,820-17,865. The Nifty is having a strong support between 17,650-17,700 and hence contra traders can take a long bet near 17,650 with strict support stop loss at 17,620.”
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
“A small negative candle was formed on the daily chart with minor upper shadow. This pattern confirms a short term top reversal at the swing high of 18114 levels and a beginning of downward correction in the market. The overhead resistance of down sloping trend line seems to have acted as a crucial hurdle for the market and resulted in a trend reversal down. Presently, Nifty is placed above the previous upside gap of 4th April at 17800 levels.
“Interestingly, any gap down opening on Thursday and if that gap is not filled during intraday pullback rally, then that could signal a formation of crucial ‘bearish island reversal’ pattern as per daily timeframe chart. On such circumstance, the Nifty could even slide down to 17K mark. The short term trend of Nifty seems to have reversed down and the downward correction is on the way. There is a possibility of further weakness in the market down to 17600 levels in the next few sessions. Confirmation of bearish Island Reversal could open more downside for the market.”
