Markets extend losses as Bajaj twins drag; Sensex ends near 60,350, Nifty below 18k

On Thursday, Sensex closed at 60,353.27 lower by 304.18 points or 0.50%. Nifty 50 ended at 17,992.15 down by 50.80 points or 0.28%. Nifty Financial Services dipped by nearly 225 points or 1.2% and Bank Nifty dropped by over 350 points or 0.8%.

Bajaj Finance was the top underperformer declining by over 7.2% and parent Bajaj Finserv followed with a downside of 5.1%. Both stocks tumbled after Bajaj Finance announced its consolidated data for December 2022 quarter.

In Q3FY23, Bajaj Finance’s new loans booked were the highest ever at 7.8 million as compared to 7.4 million in Q3FY22. Assets under management (AUM) grew by 27% to approximately ₹ 230,850 crore as of 31 December 2022 as compared to ₹ 181,250 crore as of 31 December 2021. Deposit bok rose by 41% yoy to ₹43,000 crore.

In terms of sectoral indices, on BSE, Oil & Gas was the top bull surging by nearly 2%. While Energy, FMCG, Auto, and Metal indices were top gainers with more than a 1% upside each. However, Financial Services dipped 1%, while Bankex slipped by nearly 381 points or 0.8%. IT and consumer durables also tumbled further adding to woes.

According to Deepak Jasani, Head of Retail Research, HDFC Securities, volumes on the NSE are rising gradually as people return to work after holidays. Broad market improved over the previous session with advance decline ratio rising to 0.92:1.Capital Goods, Tyres, FMCG stocks were in demand.

Further, Vinod Nair, Head of Research at Geojit Financial Services said, “Globally, investors are digesting the FOMC minutes with stock markets trading lower revealing that the Fed officials’ are determined to tame inflation by maintaining its aggressive stance. Financials led the losses in the domestic market, following dismal business numbers from the NBFC leader. Oil prices recovered after falling sharply on fears of a worldwide recession, as investors remain optimistic about long-term demand.”

On Fed’s minutes, Apurva Sheth, Head of Market Perspectives, Samco Securities said, “The US Fed published its minutes of the December meeting. The key takeaways from the minutes is that the Fed doesn’t want to take inflation lightly. Fed Chair Jerome Powell was caught on the wrong foot when he called inflation as ‘transitory’ in 2021. Fed is once bitten twice shy. They want to err on the side of caution and change gears only once they see inflation hitting their target of 2%. Clearly, they don’t want to trap themselves in a box once again.”

In two consecutive trading sessions, Sensex has shed nearly 941 points and Nifty 50 over 240 points.

Meanwhile, the Indian rupee gained against the US dollar to end at 82.5550 against the previous day’s 82.8025 per dollar. Asian currencies like the offshore Chinese yuan, the Korean won and the Malaysian ringgit climbed against the greenback.

On global markets, Jasani added, “European stocks edged lower on Thursday, snapping a three-day winning streak as minutes from the Federal Reserve’s meeting sounded a cautious tone on interest rates. Asian shares rose on Thursday on hopes for China’s emergence from the pandemic.”

Investors will keenly watch for the private US jobs report which will be announced later on Thursday and further nonfarm payrolls that are scheduled to be presented on Friday.

What to expect ahead? 

Going ahead, Ajit Mishra, VP – Technical Research, Religare Broking said, “Markets have been drifting lower amid mixed signals from the global front however the pace of decline is gradual, thanks to rotational buying in select index majors from across sectors. Technically, Nifty has retested the crucial support of medium term moving average i.e. 100 EMA on the daily chart and indications are pointing toward the negative bias to continue. Amid all, we recommend continuing with stock-specific approach while keeping a check on the position size.”

On Nifty 50, Rohan Patil, Technical Analyst, SAMCO Securities said, “Presently the immediate support for the Nifty is placed at 17,900 levels. However, if prices break below this level, then 17,800 – 17,750 will be the fast-forward target for the index. The upper band is capped below 18,200 levels where 21 EMA is placed.”

Rupak De, Senior Technical Analyst at LKP Securities expects volatility to continue over the short term, with a predominant weakness. On Nifty, the analyst said, “on the lower end, support is visible at 17800. On the higher end, resistance is visible at 18250, above which a bullish reversal may happen.”

Moreover, Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities said, the strategy should be to sell short Nifty at 18200 and place a stop loss at 18270. On the downside, buying isadvised between 17900/17850. Place stop loss at 17750/59750.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.