Frontline indices the Sensex and the Nifty snapped their four-day winning streak on September 14 as weak global cues weight on sentiment back home.
Major overseas markets suffered strong losses after the US consumer prices rose in August, dashing hopes that inflation had peaked and the pace of rate hikes will slow down.
Reuters reported that the US consumer price index edged up 0.1% last month after being unchanged in July. The rise in inflation is likely to push the Federal Reserve to go for a third 75 basis points interest rate hike next week.
Sensex opened with a massive cut of 1,154 points at the day's low of 59,417.12. It, however, narrowed the losses to 78 points at one point during the trade. The benchmark index finally closed 224 points, or 0.37%, lower at 60,346.97. The Nifty50 managed to protect the 18,000 mark, closing at 18,003.75, down 66 points, or 0.37%.
The mid and smallcaps outperformed as the BSE Midcap index closed 0.10% lower while the Smallcap index settled flat.
"Although the opening hours of the domestic market mirrored the sharp sell-off in the global market, it steadily recovered as investors gained the confidence to bottom fish, thanks to the brighter prospects for the home economy," said Vinod Nair, Head of Research at Geojit Financial Services.
Shares of IndusInd Bank, NTPC, Power Grid and SBI ended as the top gainers while those of Infosys, TCS, Tech Mahindra and HCL Tech ended as the top laggards in the Sensex index.
Among the sectoral indices, BSE IT lost 3.28%, ending as the top loser, followed by BSE Teck which settled with a cut of 2.85%.
"The expectation that the Fed would become less hawkish, which had spurred the most recent global rally, was dashed by worse than anticipated US inflation figures. Additionally, India’s easing WPI inflation numbers added more optimism with banking stocks leading the recovery, while the IT sector’s performance was bleak due to recession fears in western markets," Nair said.
BSE Oil & Gas (down 0.90%), Capital Goods (down 0.83%) and Energy (down 0.76%) also ended in the red.
The metal index, on the other hand, rose 1.91%. BSE Bankex (up 1.28%), Basic Materials (up 1.18%) and Finance (up 0.93%) also clocked decent gains.
Brent Crude traded below the $95 a barrel mark. The rupee fell 29 paise to 79.44 per dollar mark.
Despite the weakness in the market, as many as 217 stocks, including ICICI Bank, ITC, NTPC, SBI, Bank of Baroda, Fortis Healthcare and Bajaj Holdings and Investment, hit their fresh 52-week highs.
Technicals
Nifty recovered from the morning lows but ended in the red. It faced resistance from the high of the previous day.
As per Deepak Jasani, Head of Retail Research, HDFC Securities, now 18,088-18,092 could be the resistance for the near term while 17,765 could be the support.
Rupak De, Senior Technical Analyst at LKP Securities observed that the Nifty remained above its previous consolidation as the global selloff failed to pull the Indian equities down. On the lower end, the falling trend line has acted as crucial support for the Nifty.
"The index has been sustaining above the 50 exponential moving average on the daily timeframe, confirming an uptrend. Going forward, the trend will likely remain positive as long as it remains above 17,700. On the higher end, the index may move towards 18,600 once it provides a decisive breakout above 18,100," 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.
