Markets erase previous gains with Sensex, Nifty down 1%; Banking stocks drag

Markets erase previous gains with Sensex, Nifty down 1%; Banking stocks drag

Market


Sensex slipped by 631.83 points or 1.04% to end at 60,115.48. The benchmark gave up its psychological mark of 60,000 in the trading session by touching an intraday low of 59,938.38. However, in the closing hours, the benchmark regained above the 60,000 level.

Meanwhile, Nifty 50 shed 187.05 points or 1.03% to close at 17,914.15. The index touched the day’s low of 17,856.

Banking stocks were top laggards. BSE Bankex dipped over 636 points or 1.3%, while Bank Nifty tumbled by 568 points or 1.33%. Financial services, IT, consumer durables, and capital goods stocks also witnessed substantial selling further dragging the markets.

Stocks like Tata Motors, Power Grid, Tata Steel, and HUL are the top gainers. However, stocks like Bharti Airtel, SBI, HDFC Bank, Ultratech Cement, HDFC, ICICI Bank, Bajaj Finance, Reliance Industries, and NTPC were top bears with downside ranging from 1.5% to nearly 3%.

Ajit Mishra, VP – of Technical Research, at Religare Broking, said, “Markets plunged lower and lost nearly a percent, in continuation to the prevailing corrective phase. After the initial downtick, the Nifty index inched gradually lower as the session progressed and engulfed the move of the last trading session. The decline was widespread wherein banking, metal, realty and IT were among the top losers. The broader indices too witnessed pressure and lost nearly half a percent each.”

Meanwhile, according to Vinod Nair, Head of Research at Geojit Financial Services, global bourses reversed their recent gains as Fed officials stated that policymakers would raise the rate beyond 5% and hold on for a while. Sentiments in the domestic market were further dampened by the muted start to the IT earnings season, along with their cautious commentary on the demand environment.”

On Monday, TCS missed estimates in terms of profitability and margins for the quarter ending December 31, 2022. However, revenue was better than expected. In December 2022 quarter, TCS garnered a net profit of 10,846 crore attributable to shareholders on a consolidated basis up by 11.02% YoY and 3.98% QoQ. The net margin stood at 18.6% for the quarter, whereas the operating margin stood at 24.5% contracting by 0.5% YoY. While consolidated revenue from operations came in at 58,229 crore increasing by 19.11% YoY and 5.28% QoQ.

In the IT sector, investors will now await Infosys and HCL Tech Q3 earnings which are scheduled on January 12 followed by Wipro’s financial results on January 13. In the banking sector, HDFC Bank’s Q3 earning which is set to be presented on January 14 will be keenly watched.

Post Q3 earnings, TCS shares dipped by 1$, while its peer Infosys also followed with nearly a percent decline. HCL Tech shares were marginally down, while Wipro stock gained.

At the interbank forex market, the rupee erased the psychological 82-mark against the American currency to reach the best single-day gain on Tuesday since November last year. The local unit has emerged as the top performer among its Asian peers following stop-order triggers and inflows from bond selling. Rupee closed at 81.7850 against the US dollar compared to the previous day’s closing of 82.36 per dollar.

On Monday, Sensex and Nifty 50 rose by 1.4% making it their best session since the start of 2023.

Ahead, Nair said, investors are anticipating the Fed Chair’s speech later in the day, along with key inflation numbers on Thursday, to gain clarity on the Fed’s future plans.

Religare Broking’s expert added that markets are gradually drifting lower amid volatility and indications are pointing towards more pain ahead. Meanwhile, mixed global cues combined with earnings season would keep traders on the edge. He said, “We thus reiterate our view to limit positions and prefer a hedged approach, especially for the overnight trades.”

On Nifty 50, Rupak De, Senior Technical Analyst at LKP Securities said, “following a day of pause, the Nifty dropped sharply, falling below the previous session’s low. A bearish engulfing pattern on the daily chart points towards a further correction. The index, however, has been hovering within the bands of 17,750 and 18,250. A decisive breakout on either side may trigger a strong directional move.”

 

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.


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