Sensex, Nifty 50 plunge after 3 days rally; Nestle, IndusInd Bank, M&M top losers

Sensex closed at 61,002.57 lower by 316.94 points or 0.52%. While Nifty 50 ended at 17,944.20 below 91.65 points or 0.51%.

Ajit Mishra, VP – of Technical Research, at Religare Broking said, markets traded under pressure and lost nearly half a percent, pressurized by weak global cues. After the initial downtick, the Nifty index tried to pare losses but continuous selling in the banking majors combined with a downtick in the IT majors pushed the index lower.

Banking stocks were the top laggards in Friday’s session. Bank Nifty shed nearly 500 points, while the Bankex index dipped nearly 580 points.

On BSE, the IT index retreated to dive by nearly 331 points. Healthcare, Financials, Auto, and Telecom indexes as well slipped by around a percent. Capital Goods stocks outperformed the tone of the bearish market with an upside of over 310 points.

In the broader market, the BSE Midcap index slipped over 185 points.

Among losers on Sensex, Nestle held the top spot by plunging over 3.1% followed by IndusInd Bank down by nearly 3%. M&M, SBI, Kotak Bank, TCS, and HCL Tech also dipped by 1-2%.

L&T, Ultratech Cement, and Asian Paint were top gainers.

According to Vinod Nair, Head of Research at Geojit Financial Services, 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 6.0%, in contrast to the expectation of 5.4%. This suggests that interest rates have not yet peaked and will remain elevated for a long period.

Meanwhile, at the interbank forex market, the rupee continued to drop for the fourth day in a row against the US dollar on worries over surging U.S. yields. However, the downside was limited in the rupee due to likely intervention by RBI in the non-deliverable forward (NDF) market. The local unit closed at 82.83 against the greenback compared to the previous session’s print of 82.7175 per dollar.

Going ahead, Mishra 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 utilize this phase to gradually accumulate quality stocks from banking, auto, IT and FMCG space.”

On Nifty 50, Rohan Shah-head technical analyst at Stoxbox said, Nifty taking support near EMA 20. After Breakout 3 days ago, it is also retesting the sloping trendline on daily chart. Intraday traders can look for long opportunity only above 18,000 level on Monday & the price should sustains above 18,000 for 15 minutes to confirm long. Traders can look for short only if nifty breaks today’s low 17,884 & sustain for 15 min.

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.