scorecardresearchMarket Wrap: Sensex, Nifty snap 3-day winning run; investors lose over ₹1 lakh crore in a day

Market Wrap: Sensex, Nifty snap 3-day winning run; investors lose over 1 lakh crore in a day

Updated: 17 Feb 2023, 04:23 PM IST
Sensex ended 317 points, or 0.52 percent, lower at 61,002.57. Nifty50 closed at 17,944.20, down 92 points, or 0.51 percent.
Sensex, Nifty fell on February 17.

Sensex, Nifty fell on February 17.

Domestic equity benchmarks ended in the red, snapping their three-day winning run, on February 17 after an all-around selling as investors remained concerned over rising inflation, rate hikes, softer quarterly earnings of India Inc. and economic growth.

Major Asian markets traded lower and the dollar rose against its peers as investors anticipated the US Fed would continue raising rates for a longer-than-expected period.

As per Reuters, Goldman Sachs expects the US Federal Reserve to raise interest rates three more times this year, by a quarter of a percentage point each, after data this week pointed to hot inflation and labour market resilience.

Meanwhile, brokerage firm Motilal Oswal Financial Services believes that India Inc.'s profitability moderated in the December quarter of the financial year 2022-23 (Q3FY23) due to higher commodity prices even as financial and auto companies performed better during the quarter.

The brokerage firm said that the earnings of its coverage universe companies grew marginally by 1 percent year-on-year (YoY) (against the estimates of 8 percent YoY) in 3QFY23 while for Nifty, earnings growth stood at 11 percent YoY (against the estimates of 14 percent YoY).

Crude oil prices remained low and looked set for a weekly loss amid concerns over low demand as the US Fed may remain hawkish which could dent economic growth. Brent Crude traded over a percent lower near the $84 per barrel mark.

The rupee, however, fell 11 paise to 82.83 after the greenback rose to a multi-week high against its peers.

Sensex opened 326 points lower at 60,993.54 and remained in the negative territory for the entire session.

At one point during the session, the index was down 509 points at 60,810.67 but it pared losses and ended 317 points, or 0.52 percent, lower at 61,002.57. Nifty50 closed at 17,944.20, down 92 points, or 0.51 percent.

Mid and smallcaps also ended in the red. The BSE Midcap index fell 0.75 percent while the Smallcap index declined 0.24 percent.

Investors lost 1.4 lakh crore in a single session as the overall market capitalisation of the stocks listed on BSE dropped to 266.9 lakh crore from 268.3 lakh crore in the previous session.

As many as 126 stocks, including Adani Transmission, Adani Total Gas, Bata India and IPCA Labs, hit their 52-week lows in intraday trade on BSE.

For the week ended February 17, Sensex and Nifty rose by 0.5 percent each while the BSE Midcap and Smallcap indices declined by 0.8 percent each.

Lingering concerns have kept the market rangebound of late. The market witnesses profit booking after every few sessions of gains; after some correction, the market rises too.

The market has been reacting to macroeconomic prints while guessing the moves of the US Fed.

When data shows inflation declined and growth slowed, the market rises led by hopes of a pause on rate hikes by the US Fed. But when data indicates a robust US economy, tight labour market and sticky inflation, the market falls, fearing the Fed would remain hawkish.

Top Nifty gainers: Shares of Larsen & Toubro, UltraTech Cement and BPCL ended as the top gainers in the Nifty index.

Top Nifty losers: Shares of Adani Enterprises, Nestle and IndusInd Bank ended as the top losers in the Nifty pack.

As many as 33 stocks ended in the red in the Nifty50 pack.

Sectoral picture

Barring Nifty Oil & Gas (up 0.15 percent), all sectoral indices ended in the red.

The selling was broad-based as many sectoral indices, including Nifty Bank, IT, Realty, PSU Bank, Private Bank and Pharma, fell over a percent each.

Experts' views on markets

Vinod Nair, Head of Research at Geojit Financial Services said the lack of major triggers in the domestic market is attracting global cues to dictate the market trend.

"The US market is facing an unfavourable combination of higher-than-expected inflation and a stronger job market. The PPI (Producer Price Index) in the US came in at 6 percent, in contrast to the expectation of 5.4 percent. This suggests that interest rates have not yet peaked and will remain elevated for a long period," said Nair.

Ajit Mishra, VP of Technical Research at Religare Broking said weak global cues combined with continuous pressure in the banking majors is weighing on sentiment.

"We feel traders should restrict positions amid mixed cues and wait for some clarity. Investors, on the other hand, can utilise this phase to gradually accumulate quality stocks from banking, auto, IT and FMCG space," said Mishra.

Technical views on markets

Amol Athawale, Deputy Vice-President -Technical Research at Kotak Securities is of the view that for the bulls, 17,900-17,800 or 20-day simple moving average would act as a key support zone while 50-day simple moving average or 18,100 and 18,200 could be the immediate hurdle.

"The selling pressure could accelerate if the index slips below 17,800 and in case of further correction, it could slip to 17,700-17,650," said Athawale.

Rupak De, Senior Technical Analyst at LKP Securities pointed out that the Nifty has fallen to the upper band of the falling channel on the daily chart.

"The trend for the near term is likely to remain sideways to positive as long as it remains above the falling channel. A recovery towards the higher level will likely happen if the bulls manage to hold the Nifty above 17,880. On the higher end, however, 18,150 is likely to act as resistance," said De.

Key market data

Some of the most active stocks on February 17.
Some stocks at 52-week low on February 17.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.

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First Published: 17 Feb 2023, 03:31 PM IST