Sensex falters after surging over 800 points intra-day, ends 137 points lower; bank, metals & telecom stocks crumble

The Sensex was trading positive at noon after five straight day of losses.

FPJ Web DeskUpdated:Friday, May 13, 2022, 04:32 PM IST
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At close, the Sensex was down 136.69 points or 0.26 percen at 52,793.62. /Representative image |

The stock market indices closed weak after trading high during noon session. The Sensex was trading positive at noon after five straight day of losses. The index had slumped 1158.08 points or 2.14 percent on Thursday.

Bank, metal and power indices ended 1-2 percent lower, while auto, FMCG, pharma indices rose 1-2 percent. BSE midcap index rose 0.8 percent and smallcap indices added 1.3 percent.

At close, the Sensex was down 136.69 points or 0.26 percen at 52,793.62, and the Nifty was down 25.80 points or 0.16% at 15,782.20. About 2097 shares have advanced, 1166 shares declined, and 128 shares are unchanged.

Hindalco Industries, SBI, JSW Steel, NTPC and ICICI Bank were among the top Nifty losers. Gainers included Tata Motors, Sun Pharma, M&M, ITC and HUL.

Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities Ltd, said, Volatility was once again the order of the day and key indices snapped early gains on late selling pressure in metals, telecom & banking stocks. The fall came despite an upsurge seen in other Asian gauges, as the fear of rising inflation and expectations of more rate hikes in the near term weighed on investors' minds. It looks like traders are selling at every opportunity given that there seems to be no respite from the negative news flows.

After a sharp price correction, on weekly charts, the Nifty has formed a bearish candle and after a long time it closed below 16,000 mark which is broadly negative. For traders, 15,900 would act as a key resistance level and below which the index could slip till 15,650. However, 15,900 would be the immediate trend reversal level for the bulls and above which we could see a strong pullback rally up to 16,100-16,300, Athawale said.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, said, Global and domestic equity markets saw sharp decline this week as investors are worried about growth expectations amid elevated inflation levels. Sensex 30 and Nifty 50 index was down by close to 3 percent. BSE Midcap and BSE Smallcap index saw higher correction in the range of 5-6 percent. Almost all sectoral indices reported decline this week.

In India, the CPI inflation in April 2022 surged to 7.79 percent (March 2022 : 6.95 percent), while March 2022 IIP growth remained subdued at 1.9 percent (February 2022: 1.5 percent). FII’s continued their selling of Indian equities this week. Rising bond yields, high inflation levels and monetary policy tightening action by Central Banks globally will weigh on near term sentiments which could keep markets volatile. Stock-specific action will continue due to ongoing result season, Chouhan said.

Deepak Jasani, Head-Retail Research, HDFC Securities, said, Nifty opened gap-up due to positive global cues and rose to make an intra-day high post-noon. However it sold off later and closed 0.16 percent or 26 points lower at 15,782.2, in the negative for the fifth consecutive session. For the week, Nifty fell for the fifth consecutive week falling 3.8 percent.

Palak Kothari, Research Associate, Choice Broking said, Technically, the Nifty has formed a bearish candle on the weekly chart which indicates downside movement for the upcoming session. Moreover, Nifty has faced resistance from rising trendline and showed selling pressure which is a sign of selling of higher levels. In addition, Nifty has been sustained below the neck line of the Head & Shoulder pattern which indicates southward direction for the upcoming session.

However, the momentum indicators MACD & Stochastic were trading with a negative crossover and entered the oversold zone. However, till now, there is no reversal sign. The Nifty may find Strong support around 15,700 levels, while on the upside 16,100 may act as an immediate hurdle for the Nifty crossing above the same can attract fresh buying. On the other hand, Bank nifty has support at 32,600 levels while resistance at 34,000 levels, Kothari said.

Mohit Nigam, Head - PMS, Hem Securities said, traders got some solace as the commerce ministry reported that India's merchandise exports increased 30.7 percent to $40.19 billion in April, owing to strong performance by sectors such as petroleum products, electronic goods, and chemicals, despite a $20.11 billion trade deficit. State Bank of India traded lower after reporting a 37.46 percent increase in net profit for the fourth quarter and year ended March 31, 2022, compared to Rs 7,270.25 crore for the same quarter the previous year. Immediate support and resistance for Nifty are 15,600 and 16,000 respectively. Immediate support and resistance for Bank Nifty are 33,000 and 34,000 respectively, Nigam added.

Global stocks up

Global stocks rose Friday on bargain buying after Federal Reserve Chair Jerome Powell pushed back against speculation of steeper interest-rate hikes.

Asian markets were generally green, while European markets were higher following the latest consumer and producer price inflation data from the United States indicated a slowing in inflation. Market participants generally believe that larger 75-bps rate hikes in the United States are off the table for the time being.

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