Benchmark indices ended lower for the second consecutive session on February 13 with the Nifty falling below 17,800 amid volatility.
At close, the Sensex was down 250.86 points or 0.41 percent at 60,431.84, and the Nifty was down 85.60 points or 0.48 percent at 17,770.90.
On the back of mixed global cues, the market started on a flat note but soon bears took the charge and dragged the Nifty to near 17,700 levels. However, final-hour buying helped to erase some intraday losses.
“With the third quarter earnings season coming to a close this week, markets traded weak throughout the day ahead of the inflation print expected today,” said S Ranganathan, Head of Research at LKP securities.
“PSU Banks and IT stocks dragged indices as traders booked profits on a rather dull day of trade wherein most of the sectoral indices ended in the red.”
“Equity ownership of retail investors now stands at a record 24.5 percent at the end of third quarter even as they remind themselves of rising fixed income rates on dull days like today,” he added.
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Adani group stocks lose further ground
Adani Group companies witnessed further fall in their stock prices after the revenue target was revised and four group firms were downgraded by Moody’s.
According to a Bloomberg report, the Adani Group has revised its revenue growth target to 15-20 percent for the next fiscal year, which is a significant drop from the earlier target of 40 percent.
MSCI has announced its plans to alter the free float of Adani Enterprises, Adani Transmission, Adani Total Gas, and ACC. These changes will be put into effect on February 28.
Moody’s Investors Service downgraded the outlook for Adani Green Energy and three other firms backed by Indian businessman Gautam Adani last week, citing the decline in the conglomerate’s stock market value.
Among group stocks, Adani Enterprises fell 7 percent, Adani Ports down 5.25 percent, while Adani Green Energy, Adani Transmission, Adani Total Gas, Adani Wilmar and Adani Power each locked at 5 percent lower circuit.
Stocks and sectors
Adani Enterprises, Adani Ports, SBI, Infosys and TCS were among the biggest losers on the Nifty, while gainers were Titan Company, NTPC, Larsen and Toubro, Bajaj Auto and Eicher Motors.
Among sectors, Nifty metal, PSU Bank and Information Technology indices shed 1 percent each, while Nifty Bank, auto and pharma were down 0.5 percent each.
The broader indices underperformed the main indices with the BSE midcap and smallcap indices falling over a percent each.
On the BSE, except capital goods, all other sectoral indices ended in the red with information technology and realty indices shedding nearly 2 percent each.
More than 100 stocks touched their 52-week high, including Siemens, Gravita India, KPIT Technologies, Ratnamani Metals, Jindal Saw and Mold-Tek Technologies on the BSE.
However, Graphite India, Wockhardt, Bal Pharma, Indigo Paints, Ujaas Energy and Matrimony.com dragged to their 52-week lows.
Among individual stocks, a volume spike of more than 500 percent was seen in Gujarat Gas, Coforge and Balkrishna Industries.
A short build-up was seen in City Union Bank, IDFC and Balkrishna Industries, while a long build-up was seen in Glenmark Pharma, NALCO and Metropolis Healthcare.
Outlook for February 14
Deepak Jasani, Head of Retail Research, HDFC Securities:
The Nifty fell for the second consecutive session on February 13 dragged down by weak Asian cues. At close, the Nifty was down 0.48 percent or 85.6 points at 17,770.9. Volumes on the NSE were on the lower side.
Broad market indices fell more than the Nifty even as the advance decline ratio fell to 0.41:1.
Asian stock markets were mostly lower on Monday ahead of a US inflation update on Tuesday that traders worry might lead to more interest rate hikes. European markets were slightly higher as investors assess the economic outlook and the potential for further monetary policy tightening from the US Federal Reserve.
The Nifty has formed a bearish Engulfing pattern suggesting more pain in the near term. A break of 17,721 could lead to a faster fall towards 17,517-17,545 band. On upmoves, 17,877 could be tough to breach in the near term.
Q3 corporate results season could come to an end in the next two days. The majority of companies that reported numbers in the last few days have disappointed street and that is getting reflected in the poor advance decline ratio today.
Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
The Nifty opened on a flat note and witnessed selling pressure from the beginning of trade. It closed in the negative, down 85 points.
On the daily charts, the Nifty has faced selling pressure from the zone 17,850 – 17,900 where resistance in the form of the 20-day moving average (17,862) was placed. Since past one week, the Nifty has been range bound and until we get a decisive move above the zone of 17,850 – 17,900, the range-bound action is likely to continue.
The daily momentum indicator has a positive crossover which is a buy signal and also suggests that this dip should be bought into. Overall, we expect the Nifty to test the upper end (18,100) of the downward-sloping channel from short-term perspective.
Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services:
Domestic equities succumbed to weakness in global markets as investors fret over the Federal Reserve’s stress on the tightening of the monetary policy to tame inflation. The Nifty opened lower and traded in negative territory throughout the session to close with a loss of 93 points at 17763 levels.
All the sectorial indices ended in red with PSU Bank, Realty and IT down 1-2 percent each. Volatility index, India VIX rose by 8 percent to 13.7 levels.
We expect the market to remain lacklustre as investors await key economic data on the global as well as domestic front to provide some clear direction.
Domestic CPI data is to be announced today post-market, while the US would release its monthly CPI data on Tuesday along with Europe’s GDP numbers. Auto and Capital goods stocks likely to do well on the back of good quarterly results.
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