The benchmark indices closed in the red on the last day of trading this week. Both Sensex and Nifty plunged lower at end of trading. Bank Nifty was down 1.5 percent.
At close, the Sensex was down 768.87 points or 1.40 percent at 54,333.81. The broader Nifty was down 252.60 points or 1.53 percent at 16,245.40. About 1,204 shares have advanced, 2,075 shares declined, and 96 shares are unchanged.
Except for IT, all other indices were trading in the red. Auto, metals, power, capital goods, realty were down over 2-3 percent. BSE midcap index fell 2.3 percent and smallcap index 1.6 percent.
Among the top losers at end of trading were Titan Company, Maruti Suzuki, Asian Paints, Hero MotoCorp and Tata Motors. Dr Reddy's Laboratories, ITC, Tech Mahindra, Sun Pharma and UltraTech Cement were the biggest gainers.
Investors follow global market trends
Investors are selling in droves and are simply following the trend in the world equity markets. The raging war between Russia and Ukraine has already made investors jittery about the near-term prospects, said Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities Ltd. With commodity prices on the rise, corporates heavily dependent on commodities would have to battle rising prices and falling currency, which would impact their operating parameters going ahead.
Technically, post-sharp pullback rally, the Nifty took the resistance near 16,800 and corrected sharply. It made a couple of attempts to clear the resistance of 16,800 but due to constant profit booking at higher levels it failed. For the traders, 16,350 -16,400 would be the immediate resistance level. Above the same, the index could move up to 16,550 and any further upside could lift the index up to 16,700. On the other side, as long as the index is trading below 16,350, the selling pressure is likely to continue. Below which, the correction wave will continue till 16,000-15,900, Athawale said.
Besides Russia penetrating deeper into Ukraine, what also hurt sentiments were the Indian government's decision to postpone the mega initial public offering of Life Insurance Corporation of India into the next financial year, said, Prashanth Tapse, Vice President (Research), Mehta Equities Ltd. Blame the negativity to upbeat crude oil prices as they hit fresh highs above $116 per barrel mark in Thursday's session and remained buoyant in today's trade as well. The street will keenly watch on how RBI tackles with a backdrop of higher oil and commodity prices, and most importantly, growth-supporting fiscal policies. Nifty’s long term charts are still painting a bearish picture with immediate targets at 15901 mark. Confirmation of strength only above Nifty 16,807 mark.
Technically, Index has formed a bearish candle on a weekly time frame which suggests weakness in the counter, said Palak Kothari, Research Associate, Choice Broking said. Furthermore, Index has been trading with lower highs-lower low formation from the last 5 weeks which suggest a southward journey in the upcoming day. Moreover, the Index has been sustaining below 200-DMA which adds weakness in the prices. A momentum indicator Stochastic & MACD suggested negative crossover on the daily chart, which pointed-out further bearishness in the index. The index can test the physiological level of 16,000 breaching below it can show 15,800-15,700 levels while upside resistance comes at 16800 levels. On the other hand, Bank nifty has support at 34,000 levels while resistance at 35,000 levels.
Stock market indices decline during week
Indian equity markets declined in the past week. Both Nifty and Sensex lost around 1.5 percent, said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd. Nifty was at 16,431 with loss of 1.36 percent and Sensex was at 54,947 with loss of 1.63 percent during the end of the week on 4th March 2022.
The Nifty small cap index outperformed during the week with gain of 0.34 percent, while the midcap index performed in sync with loss of 1.37 percent. All sectors ended in losses on a week-on-week basis except for BSE Oil & Gas, BSE IT and BSE Metals. BSE Metal was the biggest gainer with gain of of 9.47 percent, followed by BSE Oil & Gas with gain of 5.34 percent and BSE IT with gain of 2.48 percent.
BSE Auto biggest loser among sectors
In sectoral loss, BSE Auto was the biggest loser with loss of 7.36.percent. Most of the remaining sectors lost between 1 to 4 percent.
Global equity markets volatile
Markets have been sharply volatile and the drop in Nifty from its highs is certainly not indicative of the wealth erosion in many retail investor portfolios. Even global equity markets witnessed sharp volatility amid the ongoing Russian invasion of Ukraine and its fallout in the form of sanctions and un-balanced commodity markets. Crude, natural gas and coal witnessed a sharp increase on a week-on-week basis. On the economy front, GST collections for January stood at Rs1.33 tn (Rs1.38 tn for December).
The situation in Ukraine is rapidly deteriorating, and reports from the country are difficult to confirm. There are reports that smoke was visible from a nuclear power plant in Ukraine — the largest in Europe — after Russian troops attacked. However, the nuclear power plant’s director said the facility’s nuclear security is secured at the moment. Ukraine still holds its capital city, Kyiv, more than a week into the fighting, though reports of shelling have increased in other major cities.
Meanwhile, economic sanctions from the US and its allies have effectively cut-off Russia’s economy from large parts of the global financial system.
US unemployment to come down
In US, in Labour Department’s February jobs report, economist expect 440,000 jobs, and the unemployment rate to tick down to 3.9 percent. Hourly wages are projected to grow 5.8 percent year over year. This is the last jobs report before the Federal Reserve’s next meeting, where the central bank is expected to begin hiking interest rates.
Fed Chair Jerome Powell said on Wednesday that he is leaning toward support a single 25-basis point hike in March.
Russia-Ukraine crisis, crude to decide market trends next week
With earnings season behind us and given the overall sentiments, markets are expected to move in sync with global peers in the coming week, said Chouhan. A close eye will be kept on the developments concerning the Russia – Ukraine crisis and considering the inflation overhang, market participants will also observe movements in energy prices.
