Domestic equity benchmarks the Sensex and the Nifty remained under pressure for the third consecutive session on November 21 amid weak global cues.
Concerns over rate hikes and a recession continue haunting investors. Economists, market experts and brokerage firms believe that the market may remain in a bearish phase for some more time.
Reuters reported that Goldman Sachs on Monday warned that the global equity bear market is not over as the markets are yet to see a trough in the momentum of global growth deterioration, a peak in interest rates and valuations lowered to reflect a likely recession.
Besides, fresh cases of Covid-19 in China also dealt a blow to hopes that the restrictions in China may ease sooner.
The Sensex opened 207 points lower at 61,456.33 and fell further by 604 points in intraday trade to 61,059.33.
The index finally closed 519 points, or 0.84%, down at 61,144.84 while Nifty ended at 18,159.95, down 148 points, or 0.81%. Mid and smallcaps outperformed; the BSE Midcap index fell 0.15% and the Smallcap index ended flat with a positive bias.
The overall market capitalisation of BSE-listed firms dropped to ₹280.9 lakh crore from ₹282.3 lakh crore in the previous session, making investors poorer by ₹1.4 lakh crore in a single day.
"Weakness in Asian and European indices triggered a sell-off in domestic equities. Valuations too are looking stretched which is why local traders are using the opportunity to book some profits. Also, a few Fed officials have said that rate hikes will not stop till the inflation is under control, making investors nervous about the growth prospects going ahead," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
Bharti Airtel, Axis Bank and IndusInd Bank stocks ended as the top gainers in the Sensex index while Reliance Industries, HDFC and TCS ended as the top laggards.
The Nifty IT index fell 1.55% with Larsen & Toubro Infotech, Tech Mahindra and Persistent Systems as the top losers, each falling more than 2%. Shares of L&T Technology Services ended as the lonely gainer in the IT index with a mild gain of 0.28%.
The Nifty Realty index also fell more than a percent.
On the other hand, the Nifty PSU Bank index rose 1.41% with shares of UCO Bank (up 20%), Bank of Maharashtra (14.94%), Punjab & Sind Bank (14.32%), Indian Overseas Bank (10.07%) and Central Bank of India (9.77%) clocking stellar gains.
Crude oil prices dropped amid new Covid-19 restrictions in China. Brent Crude traded near the $86 per dollar mark. The rupee, however, fell 16 paise to close at 81.85 per dollar.
Technical views by experts
As per Rupak De, Senior Technical Analyst at LKP Securities, the trend looks a bit weak with a rounding top formation on the daily timeframe. The bearish crossover in RSI with a negative divergence suggests weak momentum.
"Going forward, 18,100 may provide immediate support below which the index may drift down towards 17,750. On the higher end, resistance is visible at 18,200/18,450," said De.
Om Mehra, a technical associate at Choice Broking underscored that Nifty formed a bearish candle on the daily chart and as it closed below 18,200, the overall structure shows that the index is likely to witness consolidation or profit booking at higher levels.
On the open interest (OI) front, the highest Call OI was witnessed at 18,300, followed by 18,400 strike prices, while on the Put side, the highest OI was at 18,000 strike price, said Mehra.
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.