Key equity indices the Sensex and the Nifty ended in the negative territory for the third consecutive session on December 22 while investors awaited US Q3 final GDP and weekly jobless data, scheduled to be released later in the day.
As per media reports, economists polled by Reuters expect the final third-quarter GDP number to come in at 2.9 percent. The core PCE (Personal Consumption Expenditures) Price Index number for the same quarter and the latest US jobless claims data are due for release alongside the GDP data.
Rising Covid cases in China also influenced sentiment.
"A Shanghai hospital has told its staff to prepare for a "tragic battle" with COVID-19 as it expects half of the city's 25 million people will get infected by the end of next week, while the virus sweeps through China largely unchecked," reported Reuters.
While experts say India is unlikely to see a surge in Covid cases, investors are concerned that a fresh jump in Covid cases can trigger new curbs in China which will dent the prospects of global economic growth.
The Sensex closed 241 points, or 0.39 percent, lower at 60,826.22 while the Nifty ended the day at 18,127.35, down 72 points, or 0.39 percent.
Mid and smallcaps underperformed as the BSE Midcap index fell 0.77 percent while the Smallcap index dropped 1.83 percent.
The overall market capitalisation of BSE-listed firms fell to ₹280.5 lakh crore from ₹282.9 lakh crore in the previous session, making investors poorer by ₹2.4 lakh crore in a single day.
As many as 146 stocks, including Aarti Industries, Brightcom Group, Gland Pharma, Indigo Paints, OnMobile Global and Polyplex Corporation, hit their 52-week lows in intraday trade on BSE.
Crude oil prices witnessed a jump after US inventory data showed the Strategic Petroleum Reserve dropped to 378.6 million barrels, its lowest level since 1983. Brent Crude traded over two percent higher near the $84 per barrel mark.
The rupee closed 6 paise higher at 82.76 per dollar after the greenback eased ahead of the US Q3 final GDP data.
Top Sensex gainers: UltraTech Cement, Infosys and Asian Paints ended as the top gainer stocks in the Sensex index.
Top Sensex losers: Mahindra and Mahindra, Bajaj Finserv and IndusInd Bank ended as the top laggard stocks in the Sensex index.
The selling was widespread as most sectoral indices ended with significant losses. Nifty Auto, Metal, PSU Bank and Realty indices fell over a percent each.
Nifty Private Bank, Oil & Gas, Consumer Durables and Media indices fell almost a percent lower each. Nifty IT ended flat.
Experts' views on markets
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities underscored that the markets succumbed to losses for a third straight session as rising Covid cases in China and Japan continued to dampen sentiment, prompting investors to prune their exposure in metals, auto and realty shares.
However, other Asian and European indices maintained their upward bias, which shows that valuations are quite high and the current global uncertainty and other risk factors don't justify the higher valuations, Chouhan pointed out.
Vinod Nair, Head of Research at Geojit Financial observed that positive sentiments from the global markets failed to bolster optimism in the domestic indices.
"The losses were extended in domestic equities owing to the hawkish comments from the RBI’s MPC minutes, which suggested that a premature pause in rate tightening would be a costly policy error at this juncture," said Nair.
Technical views by experts
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas said Nifty breached the lower end of a downward-sloping channel. On the downside, it tested a rising trendline drawn from June 2022 low and closed above it.
"The index is trading near a very crucial support of 18,000. Till that level holds on a closing basis, there is scope for some recovery. However, a breach of 18,000 on a closing basis will intensify the selling pressure. On the other hand, the near-term resistance zone shifts lower to 18,200-18,300," said Ratnaparkhi.
Chouhan said the Nifty is trading near the 50-day SMA (simple moving average) but the intraday texture is indicating a strong possibility of a quick pullback rally from the current levels.
"For Nifty, 18,050 would be the key support zone for the market and if the index trades above the same it could move up to 18,300-18,350 levels. On the flip side, dismissal of 18,050 may trigger further selling pressure; below the same, the index could slip till 17,950-17,930," said Chouhan.
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.