Market Wrap: Sensex, Nifty end lower; mid, smallcaps underperform; investors lose more than ₹2 lakh crore

Weak global cues amid lingering concerns over the banking crisis, rate hikes and economic slowdown continued weighing on domestic market sentiment as the equity benchmarks the Sensex and the Nifty ended in the red on March 24.

Even though major US markets ended in the green overnight, they traded with high volatility as the undertone of the markets remain weak.

European stock markets, including the UK's FTSE, France's CAC 40 and Germany's DAX fell 2 percent each in intraday trade on March 24.

The banking crisis in the US and Europe has rekindled the memories of the 2008 global financial crisis even though many analysts highlight their dissimilarity and regulators have jumped to take prompt actions to prevent contagion effects.

Meanwhile, US Treasury Secretary Janet Yellen tried to assuage market concerns about the health of the US banks. As Bloomberg reported, she told US lawmakers that regulators would be prepared for further steps to protect the banking system if warranted.

The market appears to be pricing in more bank failures.

Sensex fell 398 points, or 0.69 percent, to end at 57,527.10 while the Nifty50 closed the day with a loss of 132 points, or 0.77 percent, at 16,945.05.

Mid and smallcaps underperformed; the BSE Midcap index fell 1.25 percent while the Smallcap index ended 1.37 percent lower.

The overall market capitalisation of BSE-listed firms dropped to ₹254.6 lakh crore from ₹257.1 lakh crore in the previous session, making investors poorer by ₹2.5 lakh crore in a single session.

For the week ended March 24, Sensex and Nifty fell almost a percent each while the mid and smallcap indices fell up to 2 percent. The Nifty Bank index ended half a percent lower for the week.

Crude oil prices extended losses on March 24 on worries about a potential oversupply after US Energy Secretary Jennifer Granholm said refilling the country's Strategic Petroleum Reserve (SPR) may take several years, reported Reuters.

Brent Crude traded a percent lower near the $75 per barrel mark.

The rupee fell 22 paise to close at 82.48 per dollar, Bloomberg data showed.

Top Nifty gainers: Shares of Cipla (up 1.07 percent), Kotak Mahindra Bank (up 0.48 percent) and Apollo Hospitals Enterprise (up 0.37 percent) ended as the top gainers in the Nifty index.

Top Nifty losers: Shares of Bajaj Finserv (down 3.94 percent), Bajaj Finance (down 3.22 percent) and Tata Steel (dow 2.72 percent) ended as the top losers in the Nifty pack.

As many as 41 stocks ended in the red in the Nifty index while only 9 ended in the green.

As many as 322 stocks, including Aditya Birla Fashion and Retail, Godrej Properties, Vodafone Idea, Life Insurance Corporation of India and Mphasis, hit their 52-week lows in intraday trade on BSE.

All sectoral indices suffer losses

All sectoral indices ended in the red on the NSE, with Nifty Media (down 2.38 percent), Realty (down 2.33 percent), Metal (down 2.27 percent) and PSU Bank (down 2.14 percent) falling more than 2 percent each.

Nifty Oil & Gas (down 1.42 percent), Consumer Durables (down 0.98 percent), Auto (down 0.76 percent), Financial Services (down 0.69 percent) and Bank (down 0.56 percent) fell up to a percent.

Expert's views on markets

"Cues from both the global and domestic markets were subdued. The asset management industry was hit hard by tax changes and the elimination of the indexation benefit of debt mutual funds," said Vinod Nair, Head of Research at Geojit Financial Services.

"The volatility was fuelled by weak European markets, which was driven by banking stocks as the CDS spread increased. Although all major sectors traded in the red, selling in the IT sector was limited despite warnings of muted growth," said Nair.

Technical views on markets

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas observed, on the hourly charts, the Nifty is trading in the zone of 16,910 – 16,970 where the crucial Fibonacci retracement levels of the previous rise from 16,828 – 17,207 are placed.

"This zone shall be the make-or-break support zone and if the Nifty fails to hold on to this support, it is likely that the index has started the next leg of the fall," said Gedia.

"The daily momentum indicator has a positive crossover which is a buy signal and is also supporting our view that the pullback rally is not complete. Thus, considering the above we shall continue to maintain our positive outlook on the Nifty. On the upside, the initial hurdle is placed at 17,180 – 17,210. Beyond this, it has the potential to touch 17,315 – 17,430," said Gedia.

Rupak De, Senior Technical Analyst at LKP Securities pointed out that the Nifty slipped below the crucial level of 16,950 as the bears gained control of the market.

"The Nifty fell after a few days of consolidation, indicating an increase in bearish bets. The momentum indicator RSI is in the bearish crossover. In the short term, the index may fall, with a potential drop to 16,750. On the higher end, resistance is visible at 17,200," said De.

Key market data

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.