Taking Stock | Third straight day of losses, market squanders 2022 gains

The Indian market extended losses to the third day on September 23 on weak global cues as the US Federal Reserve’s hawkish stance continued to roil sentiment and added to worries about global economy outlook.

Intensive selling across sectors and rupee plunging to a new low saw the market erase all the gains made this year.

At close, the Sensex was down 1,020.80 points, or 1.73 percent, at 58,098.92, and the Nifty was down 302.50 points, or 1.72 percent, at 17,327.30.

For the week, the Sensex and Nifty shed more than a percent each.

"A rise in the US 10-year bond yield and a strong dollar index influenced FIIs to flee emerging markets. A fall in liquidity in the banking system, a weak currency and a current premium valuation have set the market outlook bearish for the near term," said Vinod Nair, Head of Research at Geojit Financial Services.

"With aggressive monetary policy action by central banks, the global growth engines are in a slowdown mode, whereas India is currently in a better position with a pickup in credit growth and an uptick in tax collection."

The volatility may persist for a while. Investors are advised to wait and watch until the dust settles, he added.

Power Grid Corporation, Apollo Hospitals, Hindalco Industries, Adani Ports and SBI were among the top losers on the Nifty. Gainers included Divis Laboratories, Sun Pharma, Tata Steel, Cipla and ITC.

All sectoral indices ended in the red, with Nifty bank, energy, metal, PSU bank, and auto declining 1-4 percent.

Stocks and sectors

On the BSE, capital goods, power, realty, bank, auto, metal and oil & gas were down 1-3 percent each.

The broader indices BSE midcap and smallcap shed 2 percent each.

A short build-up was seen in Mahindra & Mahindra Financial Services, Power Grid Corporation and Indiabulls Housing Finance, while a long build-up was witnessed in Dr Lal PathLabs, ITC and Sun Pharma.

Among individual stocks, a volume spike of more than 600 percent was seen in Escorts, PVR and Mahindra & Mahindra Financial Services.

Matrimony.com, Biocon, Indian Energy Exchange, IOC, Hindustan Oil Exploration, Hester Biosciences, Gland Pharma were among the stocks which touched their 52-week low on the BSE.

However, more than 100 stocks hit 52-week high, including PC Jeweller, Page Industries, Omax Autos, Maruti Suzuki, ITC, Escorts Kubota, Hercules Hoists, Aditya Birla Fashion and Butterfly Gandhimathi Appliances.

Outlook for September 26

Santosh Meena, Head of Research, Swastika Investmart

The Indian market witnessed a sharp fall due to weak global cues. The level of 112 on the dollar index and the level of 82 in USDINR spooked the market.

FIIs have started selling again, therefore we are seeing selling pressure in large-cap stocks. Global markets are nervous after the recent 75 basis rate hike and hawkish commentary by the US Fed.

Technically, Nifty closed below the 50-DMA with a breakdown of a bearish head and shoulder formation that may lead to further weakness.

On the downside, 17,150 is the immediate support, while 200-DMA of 17,000 is a sacrosanct support.

On the upside, 20-DMA of 17,700 is a critical hurdle. We are heading into expiry week on a weaker note as the Nifty has slipped below the put base of 17,500 where 17000 is the next base.

The leader of the rally, Bank Nifty, witnessed the breakdown of upsloping channel formation with a closeg below the 20-DMA.

On the downside, 38,750 will be an important support, while 40,250 will be the critical hurdle on the upside

Ajit Mishra, VP-Research, Religare Broking

The market is witnessing pressure after remaining resilient for quite some time and indications are of a a further decline.

The Nifty has the next crucial support at the 17,100. Since most sectors are trading in tandem with the benchmark, it’s prudent to maintain short positions also. Investors, on the other hand, should utilise this phase to accumulate quality stocks in a staggered manner.