The benchmark indices came crashing on the first day of trading week on Dalal Street. All sectoral indices were in the red. The Nifty50 index continued to decline throughout the day with a loss of 2.66 percent, while Banknifty slipped 1.67 percent to settle at 36,947.55 levels. NSE Mid cap and Small Cap indices fell 3.69 percent and 4.62 percent respectively today.
At close, the Sensex was down 1,545.67 points or 2.62 percent at 57,491.51. The Nifty was down 468.10 points or 2.66 percent at 17,149.10. About 450 shares have advanced, 2938 shares declined, and 100 shares are unchanged.
All sectoral indices were trading in red, the major fall witnessed in Nifty Realty, Metal, and Media sector. On the stocks front, only two stocks Cipla and ONGC were in the gaining list while top losers were JSW Steel, Bajaj Finance, and Grasim for the day.
Amar Ambani, Senior President & Head – Institutional Equities, Yes Securities, said, "Indian equities corrected massively, possibly reacting to US equities trending lower and rise in crude oil prices. In my view, there were no positive triggers to take the market upwards in the near term and which is why volumes in large cap names are down 20-30 percent in 2022 so far, as compared to 2021, even when market caps are higher by 20-25 percent on a year-on-year basis.
"While a further 500 points downside cannot be ruled out in the Nifty, on the brighter side, the stock market is much lighter and healthier, heading into the Union Budget, after the high in mid-October 2021. Corporate earnings have been positive so far and Omicron didn’t disrupt the economy materially. The structural story remains intact and I am confident that Nifty will achieve a higher high in 2022, than what we saw in 2021,” Ambani added.
Palak Kothari, Research Analyst, Choice Broking said, "Technically, the Nifty50 index has confirmed a breakdown of the Bearish Engulfing Pattern, which indicates a downward trend. On the daily timeframe, the Nifty has slipped below 100-days SMA, which also suggests bearish movement in the index. An indicator MACD witnessed a negative crossover on a daily scale that supports weak sentiments for the coming day. At present, the Index has support at 16,950 levels while resistance comes at 17,350 levels. On the other hand, Bank Nifty has support at 36,600 levels while resistance at 37,400 levels."
Mohit Nigam, Head - PMS, Hem Securities, said, "It was the biggest daily fall in Sensex since November. The major reasons behind today’s sell-off include global weakness, FIIs selling and expectations of FED tightening in the upcoming FOMC meeting. We believe this is an overreaction to US Fed tightening and we may witness a rally again in the short-term post FOMC meeting. We have a bullish view on the Indian economy and believe that Investors should utilize this correction as an opportunity to accumulate quality stocks in tranches. On the technical front 17,000 and 17,500 are immediate support and resistance in Nifty 50 respectively. For Bank Nifty 36,500 and 37,500 are immediate support and resistance respectively."
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd said, "Markets were extremely nervous ahead of the US FOMC meeting on Tuesday and Wednesday and expectations of a rate hike or any decision to hike rate in the near-term triggered wide-spread selling. The Nifty broke the 50 day SMA and post-breakdown it witnessed selling pressure throughout the day. However, the index found support near the 17,000 level and trimmed some losses in the last hour of trade. On daily charts, the index has formed a long bearish candle and closed below the 50 day SMA which is broadly negative. If the Nifty manages to trade above 17,050, a pullback rally could be on the cards and can move further up to 17,300-17,450 levels. On the flip side, dismissal of 17,050 could trigger one more leg of correction up to 16,900-16,800."
Deepak Jasani, Head of Retail Research, HDFC Securities said, "Nifty came under intense selling pressure on January 24 due to fund outflows from FPIs ahead of the monetary withdrawal by global Central Banks and rate hikes, rising crude oil prices whose outlook has worsened following the Russia Ukraine standoff and the forthcoming Union Budget followed by state election outcome. Advance decline ratio at 167/1,948 on the NSE was the worst since March 23, 2020. Though the Nifty has not closed at the intra day low, not many would attempt to do aggressive bottom fishing on Tuesday ahead of the holiday on January 26 and the US Fed meet outcome. Nifty could remain in the 16,955-17,298 band in the near-term."
Prashant Tapse, Vice President (Research) at Mehta Equities Ltd, said, "Technically, Nifty’s daily charts are still painting a bearish picture; downside risk seen at 16,401 mark and then aggressive targets at 16,001. The technical landscape will improve considerably only above Nifty 17,777 mark. We suspect bears will remain in full control as the pessimistic theme at Dalal Street is also surrounded on anticipation of a populist budget ahead of 5 state elections. Massive profit booking will continue to be the preferred theme in near term and nevertheless, any "risk-on" move will have to wait."
