Bears remained in control on Dalal Street on Tuesday, forcing headline indices to close the day in red. S&P BSE Sensex fell 388 points or 0.66% to close at 58,576 points while the NSE Nifty 50 index shed 144 points or 0.82% to end at 17,530. Axis Bank soared 1.6% higher to end as the top Sensex gainer, followed by Kotak Mahindra Bank, and Power Grid Corporation. Tata Steel was the top laggard, falling 2.63%, followed by Bajaj Auto, and Tech Mahindra. Bank Nifty outperformed, gaining 0.36% to finish the day at 37,747 while India India VIX closed with losses. Broader markets fared worse than benchmarks.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities –
“After showing resilience in the last few sessions, the overall market breadth has turned negative on Tuesday and broad market indices have closed in the red. This is not a good sign and one may expect further weakness ahead. The short term trend of Nifty continues to be negative. Though, Nifty placed at the support of 17400 levels, there is a possibility of further weakness in the short term. The market could possibly find support around 17300 levels and is expected to bounce from the lows.”
Rupak De, Senior Technical Analyst at LKP Securities–
“Nifty slipped lower as it broke the support of 17600. On the lower end, it found support around 17400 before closing about 90 points off the day’s low. The bias, however, remains weak as the Nifty ended below the support of 17600, which is likely to act as resistance going forward. On the lower end, 17400 may continue to act as support below which the Nifty may witness a serious correction.”
Vinod Nair, Head of Research at Geojit Financial Services –
“Hyperinflation & risk of a policy rate hike are placing the global market on its toes and are impacting the performance of equities with a rise in yield. Inflation in India is also expected to be on the higher side in Q1FY23, it is expected to subside due to a reversal of commodity prices and improvement in supply. The domestic market is also cautious in anticipation of Q4 results.”
Neeraj Chadawar, Head – Quantitative Equity Research, Axis Securities –
“Weakness continued for the second straight day taking a weaker global cue from the global market. US 10 year bond yields are hovering around 2.8%, on an expectation of higher inflation in the US market and the hawkish FED stance. As we have seen historically, value themes tend to do better in rising inflation and interest rate scenarios. We could see a good allocation in value-oriented sectors in the next 1-2 years. In Q4FY22, we expect commodities and services which include Banks, Metals, Oil & Gas, and IT to display robust earnings growth on a YoY basis. Keeping the heightened commodity cost pressure and the supply side constraints in view, it is likely to be a challenging quarter for commodity consumers like Automobiles, FMCG, Cement, and Specialty Chemical sectors.”
