Domestic market benchmarks the Sensex and the Nifty ended lower for the second consecutive session on February 13 as investors' risk appetite remained low amid lingering concerns over inflation, rate hikes and global economic slowdown.
India's retail inflation numbers for the month of January are expected today.
Economists expect the inflation numbers to come near 5.99 percent, just a whisker away from the upper limit of RBI's tolerance band of 2-6 percent.
Rupee's weakness as the dollar moved toward a five-week high and rising bond yields also weighed on sentiment.
The dollar rose against its major peers as investors anticipated a more extended phase of monetary tightening by the Federal Reserve.
Back home, the rupee fell 22 paise to close at 82.73 per dollar. India's benchmark 10-year bond yields rose 0.3 percent in intraday trade to the 7.387 level.
Rising yields indicate that rates will remain higher for longer.
For investors, along with the domestic inflation numbers, the US consumer price data (expected on February 14) is a key event which will give them a cue on the direction of rate hikes.
The latest stronger-than-expected US jobs data indicate that the economy is on a strong footing and if inflation data comes higher, Fed will not hesitate in keeping rates high for a longer period.
Sensex ended 251 points, or 0.41 percent, lower at 60,431.84 while the Nifty50 closed at 17,770.90, down 86 points, or 0.48 percent.
Mid and smallcaps suffered deeper losses; the BSE Midcap index ended with a loss of 1.25 percent while the smallcap index fell 1.17 percent.
The overall market capitalisation of BSE-listed firms dropped to ₹265.8 lakh crore from ₹268.2 lakh crore in the previous session, making investors poorer by ₹2.4 lakh crore in a single day.
As many as 151 stocks, including Adani Green Energy, Adani Transmission, Coffee Day Enterprises, Graphite India, Indigo Paints and Wockhardt, hit their 52-week lows in intraday trade on BSE.
Top Nifty gainers: Shares of Titan, Larsen & Toubro and NTPC ended as the top Nifty gainers.
Top Nifty losers: Shares of Adani Enterprises, Adani Ports and SBI ended as the top Nifty losers.
Among the 50 components, 16 ended with gains while the remaining 34 ended in the red in the Nifty index.
Sectoral picture
Barring Nifty FMCG, which ended flat, all sectoral indices ended lower.
Nifty PSU Bank and Media indices fell over 2 percent each. Nifty IT and Realty fell nearly 2 percent each while Nifty Metal fell over a percent.
Nifty Bank dropped 0.67 percent. Nifty Private Bank, Auto, Financial Services and Pharma indices fell up to half a percent.
Expert's views on markets
Vinod Nair, Head of Research at Geojit Financial Services said that the domestic market is experiencing a broad-based selloff in response to rising bond yields and the dollar index.
He said that the clampdown on the Adani Group is adding anxiety to the domestic market.
Moreover, domestic inflation is expected to rise from its 12-month low of 5.7 percent in December, nudged up by higher food inflation, while US inflation is expected to fall further from its December low of 6.5 percent, alleviating concerns about US rate hikes. However, interest rates are expected to stay high in 2023 and elevated yields will be a discomfort for equity, said Nair.
Technical views on markets
Shirkant Chouhan, Head of Equity Research (Retail), Kotak Securities pointed out that Nifty has been consistently witnessing profit-booking near the 20-day SMA (simple moving average).
He said a bearish candle on daily charts, and a close below 17,800 are indicating further weakness from the current levels.
"For the traders now, 17,850 would act as a key resistance level. Below this, the Nifty could slip to 17,650-17,600. On the flip side, a fresh uptrend rally is possible only after the dismissal of 17,850, above which, the market could move up to 17,925-17,950," said Chouhan.
As per Rupak De, Senior Technical Analyst at LKP Securities, the Nifty formed a bearish engulfing pattern on the daily chart as sellers outnumbered buyers during the session.
"On the daily chart, the index found resistance around the upper band of the falling channel, resulting in a fall towards 17,700. The momentum oscillator RSI is about to enter a bearish crossover on the daily chart. The trend looks sideways to negative for the near term as the headline index failed to provide an upside breakout. On the lower end, crucial support is visible at 17,650, below which Nifty may witness a significant correction," 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.
