Domestic equity benchmarks the Sensex and the Nifty ended in the red for the third consecutive session on January 12 as the risk appetite of investors remained low ahead of the release of important US and domestic macroeconomic data and earnings of IT heavyweights Infosys and HCL Tech.
Investors await the US inflation data that will shape the Fed rate hikes' expectations. Among the domestic macroeconomic prints, November industrial production and December retail inflation data are due today.
On the earnings front, Infosys and HCL Tech numbers and guidelines will set the mood of the market. Management commentary on deal pipelines and the impact of global headwinds will be in focus.
Sensex opened 22 points lower at 60,083.03 and rose 185 points briefly. It quickly slipped into the red, falling as much as 473 points to 59,632.32 intraday.
The index pared losses and finally closed 147 points, or 0.25 percent, lower at 59,958.03 while the Nifty50 closed 38 points, or 0.21 percent, lower at 17,858.20.
The BSE Midcap index fell 0.24 percent while the Smallcap index slipped 0.02 percent.
The rupee gained 2 paise to close at 81.55 per dollar amid weakness in the domestic market. The domestic currency did not see a sharp fall because the US dollar hovered near a seven-month low against a basket of currencies.
Crude oil prices rose as the demand outlook improved after China ended Covid curbs. Brent Crude traded over a percent higher near the $84 per barrel mark.
Top Sensex gainers: UltraTech Cement, Larsen & Toubro, HCL Tech, Maruti and Nestle ended as the top gainer stocks in the Sensex index.
Top Sensex losers: Reliance Industries, Axis Bank, Tata Motors, Kotak Mahindra Bank and Bharti Airtel ended as the top loser stocks in the Sensex index.
Most sectoral indices ended with losses. Nifty Oil & Gas fell by a percent, while Nifty Bank, Private Bank, FMCG, Financial Services and PSU Bank ended with losses of up to half a percent.
Nifty Media index rose 0.80 percent while Nifty IT ended with a gain of 0.43 percent.
Experts' views on markets
Vinod Nair, Head of Research at Geojit Financial Services pointed out that the domestic market continued to remain volatile as investors eagerly awaited the earnings of other IT majors after a cautious warning from TCS.
Nair said foreign institutional investors (FIIs) continue to dump Indian equities in search of cheaper investment avenues. Uncertainties over upcoming inflation numbers at home and in the US kept the domestic market unstable, even as western peers stayed optimistic, he said.
Technical views by experts
Rupak De, Senior Technical Analyst at LKP Securities pointed out Nifty remained volatile throughout the session with mostly a bearish bias as it closed below the crucial short-term moving average (50 EMA).
"The daily RSI is in bearish crossover on the daily timeframe, suggesting sluggish momentum. Over the short term, the trend is likely to remain sideways or negative. On the higher end, resistance is visible at 18,000. On the lower end, support is visible at 17,750," said De.
According to Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas, the Nifty managed to hold on to the zone of 17,750 – 17,800 for the third occasion indicating that bulls are rushing in to buy at the crucial support level.
"The Nifty is forming a base triangle and is currently in the final leg of that pattern. Once this pattern is complete, the index is likely to resume its rise towards the upper boundary (18,300) of the broad trading range 17,800 – 18,300. The hourly momentum indicator has triggered a positive crossover and is also showing divergence indicating that the momentum on the downside is weakening and the Index is likely to start a fresh leg of up-move in the next few trading sessions," said Gedia.
"Overall, from a short-term perspective, the Nifty is likely to trade within the broad range of 17,800 – 18,300. 17,750 – 17,800 is a crucial support zone while 18,000 – 18,100 shall act as an immediate hurdle zone," Gedia said.
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.