Weak global cues spilt into the domestic market as equity benchmarks the Sensex and the Nifty ended in negative territory on March 23 after the US Fed raised interest rates by 25 bps and gave mixed signals on the future hikes.
"The Fed's statement suggested it was on the verge of pausing interest rate rises, but Powell in his press conference said the central bank would do ‘enough’ to tame inflation, and he raised the possibility of further increasing rates if necessary," reported Reuters.
Wall Street ended sharply lower overnight. European markets were trading lower around 3:30 pm India Standard Time (IST).
Sensex opened 153 points lower at 58,061.41 against the previous close of 58,214.59 and fell 376 points in intraday trade to 57,838.85.
The index finally ended 289 points, or 0.50 percent, lower at 57,925.28 while the Nifty50 closed the day at 17,076.90, down 75 points, or 0.44 percent.
The BSE Midcap index fell 0.45 percent while the Smallcap index ended 0.15 percent lower.
Crude oil prices fell as the US Fed rate hike weighed on sentiment. Brent Crude traded about a percent lower near the $76 per barrel mark.
The rupee jumped 40 paise to close at 82.26 per dollar, Bloomberg data showed, as the dollar eased against its peers.
Top Nifty gainers: Shares of Hindalco (up 1.49 percent), Maruti (up 1.29 percent) and Nestle (up 1.01 percent) ended as the top gainers in the Nifty index.
Top Nifty losers: Shares of SBI (down 1.83 percent), Bajaj Auto (down 1.55 percent) and Kotak Mahindra Bank (down 1.53 percent) ended as the top losers in the Nifty pack.
As many as 30 stocks ended in the red in the Nifty50 index, while 19 ended with gains and one - TCS - remained unchanged.
Banking stocks among the top drags
Banking stocks, including HDFC Bank, Kotak Mahindra Bank, SBI and ICICI Bank were among the top drags on the benchmark Sensex.
Nifty Bank closed lower by a percent and only one stock - Bandhan Bank (up 0.31 percent) - out of the total 12 closed in the green in the index.
Nifty PSU Bank index fell 1.74 percent, followed by Nifty Realty (down 1.08 percent). Nifty Private Bank, IT and Financial Services fell up to a percent.
Nifty, FMCG, Pharma and Metal indices ended with nominal gains.
Experts' views on markets
"Although the Fed's decision to increase rates by 25 basis points was in line with expectations, concerns were raised by the US Treasury Secretary's statement that blanket insurance for all deposits was not being considered," said Vinod Nair, Head of Research at Geojit Financial Services.
"The domestic market attempted to recoup its initial losses with the help of favourable US futures as the Fed hinted at its plan to pause rate hikes sooner. However, the recovery was short-lived due to a sluggish start in the European market led by a 50bps hike by the Swiss National Bank," Nair said.
Ajit Mishra, VP of Technical Research at Religare Broking said that the markets have been facing tremendous pressure on every rise, tracking mixed global cues and we are seeing a similar situation on the sectoral front too as there is hardly any consistency in the trend.
"For further rebound, Nifty should decisively cross the 17,200 mark. Meanwhile, it is prudent to restrict positions and wait for clarity," said Mishra.
Technical views on markets
Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities observed that the Nifty once again failed to clear the short-term resistance of 17,210. The index has also formed a double top formation on intraday charts, indicating further weakness from the current levels.
"For the bulls, 17,050-17,000 would act as important support zones while 17,200-17,250 could be key resistance areas for the short-term traders. However, below 16,950, the uptrend would be vulnerable," said Chouhan.
Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas pointed out that on the daily charts, the levels of 17,180 – 17,210 acted as a stiff resistance and the Nifty was unable to surpass it.
On the hourly charts, the Bollinger bands are contracting, indicating rangebound price action. The hourly momentum indicator has a negative crossover which also indicates range price action before it starts a new cycle.
"We believe that this fall is a retracement of the rise from 16,828 – 17,207. Overall, we expect the Nifty to hold on to the support zone of 17,020 – 16,970 and resume the pullback over the next few trading sessions. on the upside, the initial hurdle is placed at 17,180 – 17,210. Beyond this, it has the potential to 17,315 – 17,430," said Gedia.
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.