Domestic market benchmarks the Sensex and the Nifty suffered losses for the third consecutive session on January 6 as investors remained concerned over persisting headwinds of rate hikes and global economic slowdown.
Global cues were weak after the strong labour-market data bolstered the case for further rate hikes by the US Federal Reserve.
The dollar also touched a one-month high against major currencies as investors braced for the crucial US non-farm payrolls report later in the day, reported Reuters.
Investors fear that the Fed may hike rates aggressively and keep them up for a long time after the minutes of the last policy meet showed Fed's strong resolve to fight against inflation.
Sensex opened 35 points up at 60,388.74 and rose 184 points to hit its intraday high of 60,537.63. However, the index soon erased all gains and plunged 683 points to hit its intraday low of 59,669.91.
The index finally closed at 59,900.37, down 453 points, or 0.75 percent while the Nifty settled at 17,859.45, down 133 points, or 0.74 percent.
Mid and smallcaps also ended in the red. The BSE Midcap index fell 0.72 percent while the Smallcap index declined 0.73 percent.
The overall market capitalisation of BSE-listed firms dropped to ₹279.8 lakh crore from ₹281.9 lakh crore in the previous session, making investors poorer by ₹2.1 lakh crore in a single session.
Crude oil prices saw mild gains. Brent Crude traded near the $79 per barrel mark. The rupee, on the other hand, fell 17 paise to close at 82.72 per dollar after the dollar index firmed.
Top Sensex gainers: Only five stocks - Mahindra and Mahindra, Reliance Industries, Nestle, ITC and Larsen & Toubro - were in the green at the time of Sensex closing.
Top Sensex losers: Shares of TCS, IndusInd Bank, Bajaj Finserv, Tech Mahindra and Bajaj Finance ended as the top losers in the 30-share pack Sensex.
Barring Nifty Consumer Durables and FMCG indices, which ended flat, all ended in the red. Nifty IT lost 2 percent as chatter on rate hikes and concerns over a recession in the West grew stronger.
Nifty Media and Private Bank indices fell over a percent each. Nifty Bank, Financial services, Metal, PSU Bank, Pharma, Healthcare and Realty indices fell up to a percent each.
Experts' views on markets
"Investor risk sentiment took a blow post the release of the FOMC meeting minutes, which indicated further rate hikes in 2023 to tame inflation. Upcoming key US jobs data is expected to be encouraging which would influence the next Fed’s policy," said Vinod Nair, Head of Research at Geojit Financial Services.
Ajit Mishra, VP - Technical Research at Religare Broking is of the view that weak global cues are weighing on sentiment in absence of any major trigger from the domestic front.
He said the market may see some breather after the recent slide but the tone is likely to remain negative due to the weak structure of several index heavyweights.
"Participants should align their positions accordingly while keeping a check on leveraged trades," he said.
Technical view on markets
Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas observed Nifty once again fell towards the 20 WMA, daily lower Bollinger Band and the 50 percent retracement of the Sept-Dec 2022 rally.
"Structurally, the Nifty has reached the lower end of the short-term consolidation range, which is 17,800. Unless the index breaks 17,800 on a closing basis, it is likely to stay in the short-term consolidation mode. On the other hand, the level of 18,000 will act as resistance for any minor degree bounce," said Ratnaparkhi.
As per Rupak De, Senior Technical Analyst at LKP Securities, momentum indicator RSI (14) is in a bearish crossover, suggesting weak price momentum for the near term.
"Going forward, 17,770 is likely to act as support for the Nifty; a decisive fall below this level may take the index towards 17,500. On the higher end, resistance is visible at 18,000, above which a recovery may come," 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.