Key indices end in deep red below psychological levels amid global rout

The benchmark stock market indices closed in the red--just as they began at the opening bell. Both the Sensex and Nifty50 tanked at the end of trading session on May 12. Sensex plunged 2.14 percent while the NSE Nifty 50 fell 2.22 percent. Bank Nifty nosedived 3.3 percent. All sectors closed in the red.

The Rupee slid to historic low of 77.63 as well. Global indices also tumbled during the day on rising inflation concerns as the US inflation rises for the month of April above expectations.

At close, the Sensex was down 1,158.08 points or 2.14 percent at 52,930.31 against its previous day's close at 54,088.39 points. The Nifty was down 359.10 points or 2.22 percent at 15, 808 against its previous day's close at 16,167.10 points. About 747 shares have advanced, 2,542 shares declined, and 84 shares are unchanged.

Earlier, the Sensex started the trade deep in the red at 53,608.35 points and slumped to a low of 52,702.30 points in the intra-day. This is the fifth straight session of loss in the benchmark Sensex. The Sensex had lost 276.46 points or 0.51 percent on Wednesday.

Among top laggards were Adani Ports, IndusInd Bank, Tata Motors, Tata Steel and Hindalco Industries. Wipro was the only gainer.

The index heavyweight Reliance Industries fell 1.99 percent to Rs 2400.95. Only one of the 30 scrips that are part of the Sensex closed in the positive. Wipro rose 0.91 percent to Rs 475.50.

Prashanth Tapse, Vice President (Research), Mehta Equities Ltd, said, “Undoubtedly, the biggest negative catalyst continues to be Inflation all over global economics. The latest US consumer price index (CPI) data released for April rose at an annual rate of 8.3 percent – down from March's 8.5 percentpace to mark the first drop in inflation in eight months but still concerning signs. The anxiety at stock markets across globe is on backdrop Federal Reserve’s next strategy on interest rates and other monetary policy. The concern is that aggressive action to tame inflation might cause the economy to tip into recession."

The Indian equity benchmarks enlarged their losses in the late afternoon session dragged by Metal, Power and Utilities shares and ahead of domestic retail inflation numbers, said Mohit Nigam, Head-PMS, Hem Securities. Traders were cautious even after a private report stated that India and Oman agreed to undertake a joint feasibility study, before going ahead with a preferential trade deal on limited goods. Fall in global equities after the US inflation data hinted at more aggressive tightening by the Federal Reserves to tackle slowdown in economies over world dented traders’ sentiments.

Depreciating the rupee also added pressure on the markets. Indian rupee hits a fresh low amid risk aversion in the global markets and strong dollar. Russia-Ukraine war and China's COVID lockdowns also worried investors. On the global front, all Asian markets and European markets were trading lower after U.S. consumer price inflation data released overnight did little to ease investor worries over the outlook for inflation and interest rates, Nigam added.

Immediate support and resistance for Nifty are 15,600 and 16,000 respectively. Immediate support and resistance for Bank Nifty are 33,500 and 34,500 respectively,he added.

Sumeet Bagadia, Executive Director, Choice Broking said, Weak demand outlook due to rising COVID cases in China as well also dented the pullback rally. Bank Nifty witnessed more sell off during the day. All sectors ended in red, as maximum losses were contributed by Nifty PSU Bank and Nifty metal by 5-4 percent each and not even a single sector ended with gain. In Nifty stock only WIPRO closed with marginal gain while remaining 49 stocks ended on the negative side. FIIs have pulled out almost 23,665 crore so far in the month of May would be a worry to stabilize the market. INDIA VIX has jumped 6.45 percent intraday and settled at 24.27.

Technically, The Nifty has formed a bearish candle on a daily chart. The next immediate support remains at 15650 followed by 15500 levels. While resistance is placed at 16050. Price ticking below the major moving average would be a concern for bulls. Indicators such as RSI and MACD are oversold zones. Hence buying would be expected after sustaining 16150 levels. On the other hand, Bank nifty has support at 32500 levels followed by 32000 while resistance is placed at 34600 levels, added Bagadia.

FIIs remain net sellers

FII’s have remained net seller’s with selling worth (-)64,318 crore and on counter trade DII have bought (+)48,669 crore, said Tapse. However significant decline in Chinese COVIDcases and US Bond trading below 3 percentmay give some sort of relief to global equities which can bring in short covering. Technically, Nifty (15842) is trying to defend and hold 15800 physiological mark with logical support near 15,697 levels. Any short covering in markets and close above 16,000 mark in Nifty can bounce back to 16,600 levels.”

Rupee ends 19 paise lower

Indian rupee ended 19 paise lower at 77.42 per dollar on Thursday versus Wednesday’s close of 77.23.