After a flat opening, the benchmark index traded lower consecutively for the third day in a row. At close the Sensex tanked 329.06 points to end at 57,788.03; Nifty declined 103.50 points to 17,221.40.
Bank Nifty closed the session at 36789.55 level with a loss of 104.40 points. On the sectoral front, all the indices ended in red except Nifty Auto, while Nifty Media, Metal and IT were the top losers.
Stocks like SUNPHARMA, KOTAKBANK, M&M & TATACONSUM were the top gainers while, BAJFINANCE, BAJAJFINSV, ADANIPORT & ONGC were prime laggards.
Palak Kothari, Research Associate, Choice Broking, said, "The technical front, the index has been trading with lower highs and lower lows from the last three trading sessions which points out the weakness in the counter. Moreover, the index has been facing resistance from 21-DMA and sustained below the same which adds bearish momentum for the next day. A momentum indicator Stochastic suggested negative crossover on the daily time-frame, which confirmed a bearish move for the upcoming session. At present, the Index has support at 17,150 levels while resistance comes at 17,400 levels. On the other hand, Bank Nifty has support at 36,300 levels while resistance at 37,500 levels."
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said, "Key benchmark indices witnessed weak momentum throughout the day, as profit booking was seen in Realty and Media stocks. However, buying was seen in select auto stocks despite tepid market conditions. We continue to remain cautious and the intraday texture is still on the downside. This weak outlook will remain as long as Nifty does not surpass 17,350, which is the short-term resistance zone. Below the same, the correction wave is likely to continue up to 17,150-17,120 levels, whereas above 17,350 resistance breakout, a pullback rally could be seen up to 17,400-17,425."
Mohit Nigam, Head-PMS, Hem Securities, "Nifty 50 formed a bearish candle on the daily chart with index managing to close a day near the good support zone of 17,200. If it manages to hold above said levels we may see swift bounce otherwise we may see more drag down towards 17,100-17,000-mark which is another support zone on the downside. Volatility gauge Index rose 1.53 percent to 0.26. The focus now shifts to the crucial US Federal Reserve meeting due later today as rapid tapering of monetary stimulus is expected amid elevated inflation levels."
The Rupee ended at 76.23-at lowest level versus dollar since April 24, 2020. Stock-specific action seen was seen in TCS as Fitch upgraded rating from A- to A and outlook stable from negative. In the 50-share pack, Sun Pharma was the biggest gainer, up 2.52 percent. Bajaj Finance was the top loser in the pack, down 3.09 per cent. Bajaj Finserv, Adani Ports and ONGC were other losers in the pack. Crucial support for Nifty 50 is 17,000 while Nifty may face some resistance at 17,500, Nigam added.
Deepak Jasani, Head of Retail Research, HDFC Securities, said, "On a day when the volumes on the NSE were below the recent average, Realty, Metals, IT indices fell the most, while Capital Goods and Auto indices gained the most. BSE Midcap index fell in line with the Nifty while Smallcap index fell 0.35 percent. Nifty closed down after a promising morning session, selling off ahead of the crucial US Fed meet later in the day. In the process it closed below the upgap created on December 8 and nullified the effect of the near doji formation on the previous day. Nifty could open sharply higher or lower on December 16 based on the outcome of the US Fed meet. 17,054-17,405 could be the band for the Nifty over the next few sessions, a breach of which could lead to accelerated move in that direction."
Prashant Tapse, Vice President (Research) at Mehta Equities Ltd, said, "Inflation worries and nervousness surrounding Fed's policy decision caused the benchmarks to end on a subdued note for the third consecutive day. The street will react to overnight Fed's meeting outcome. Hence, a more aggressive approach could see tech stocks and emerging stock markets like India drop hard while a lax approach could simply see Nifty heading towards 18,000 mark. Digging deeper, the headline U.S inflation for November was up 0.8 percent M-o-M and 6.8 percent Y-o-Y – the fastest annual pace since 1982 this ideally means more aggressive action from the Fed sooner than later. The Fed has already announced it would reduce the pace by $15 billion a month, $10 billion in Treasuries and $5 billion in mortgage-backed securities. In today’s FOMC meeting, if the US policymakers keep rates on hold, one should note that withdrawing support programs is the first step towards tightening, which means the chances of one or two rate hikes in 2022 have increased."
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