Domestic equity market indices closed lower on Wednesday as high inflation and expected hawkish monetary policy dimmed the market sentiments. Nifty 50 touched 17,663.65 levels during the day however the index reversed course in the second half settling at 17,475.65 points. Similarly, BSE Sensex opened 300 points higher on Wednesday however it closed 237 points lower at 58,338.93 level. In terms of sectoral indices, auto, bank, realty and consumer durable stocks closed in red, while pharmaceutical, metal and FMCG stocks closed in green. India VIX was down over 2% at 17.79 level.
Mohit Nigam, Head – PMS at Hem Securities
“Markets made a gap up opening but not able to sustained due to global cues and weekly expiry and closed in red. Maruti Suzuki, HDFC, HDFC Bank, Tata Motors and Dr Reddy’s Labs were among the top Nifty losers Whereas, ONGC, Apollo Hospitals, ITC, Sun Pharma and UPL were among the top gainers. On the technical front, the key resistance levels for Nifty50 are 17600 and on the downside 17300 can act as strong support. Key resistance and support levels for Bank Nifty are 37800 and 37100 respectively.”
Vinod Nair, Head of Research at Geojit Financial Services
“Though the global markets have already factored higher levels of inflation owing to high fuel and food prices, the unfavourable numbers dampened investor sentiments. The ECB policy decision will be closely monitored for direction on how the Central bank plans to balance slowing growth and record-high inflation. With the onset of the earnings season, the market is likely to be buoyed by sector specific momentum”.
S. Hariharan, Head- Sales Trading at Emkay Global Financial Services:
“The impact of high commodity prices have started showing up in CPI inflation prints and forced RBI’s hand to reduce accommodation and open up a path for higher rates starting from Jun. Tighter financial conditions are unfavourable for valuations of mid & small caps and the outlook favours defensive posturing for portfolios. IT stocks have been seeing meaningful short build-up going into results despite expectations of strong numbers as well as demand commentary – fears of a US slowdown are serving to dampen valuation across all IT stocks, especially so in mid-cap IT space. Banks are expected to post strong numbers for the quarter – higher inflation initially aids credit growth and this is expected to show up in robust NII growth as well as NIMs. Foreign flows are expected to remain subdued on account of tightening global liquidity conditions and hence, FPI flow is likely to be negative in the short term..”
Kunal Shah – Senior Technical & Derivative Analyst at LKP Securities
“The Bank Nifty index saw fresh short position built up in the future segment indicating weakness. The index however is stuck in a broad range between 37,000-38,000 and a breach on either side will result in trending action. The index if breaches the level of 37,000 next week will open room for further downside towards 36,000 level”
S Ranganathan, Head of Research at LKP securities
“Capital Goods stocks were sought after today on expectations of revival in capex spends. March exports rising 20% boosted sentiments even as the street remains cautious on rising inflation and commodity prices and its impact on earnings of companies. The broader markets saw demand for Hospitality, Cement & Gas stocks”
