Stock markets lose grip after a firm start as weak Asian cues trigger selling in late trade

Stock markets lose grip after a firm start as weak Asian cues trigger selling in late trade

BSE midcap index fell 0.8 percent and smallcap index shed 1 percent

FPJ Web DeskUpdated: Tuesday, May 24, 2022, 05:05 PM IST
article-image
BSE midcap index fell 0.8 percent and smallcap index shed 1 percent./ Representative image | Photo credit: IANS

The benchmark indices closed weak after volatile trading. Bank Nifty gained 0.12 percent to close at 34,290 with a gain of 42 points. India VIX was up 9.57 percent. Thirty three stocks out of NIFTY 50 closed in red which suggest broad based selling. Nifty Healthcare, FMCG, IT, capital goods indices down 1 percent each while Nifty Auto &and Bank ended in green.

At close, the Sensex was down 236.00 points or 0.43 percent at 54,052.61. The Nifty was down 89.50 points or 0.55 percent at 16,125.20. About 1,005 shares have advanced, 2,220 shares declined, and 121 shares are unchanged.

The 30-share BSE benchmark opened higher but could not carry forward the momentum and declined 236 points or 0.43 percent to settle at 54,052.61. During the day, it hit a low of 53,886.28 and a high of 54,524.37.

In the Sensex pack, Tech Mahindra, Hindustan Unilever, HCL Technologies, Asian Paints, NTPC, Tata Steel, Infosys, Axis Bank and Bajaj Finserv were among the biggest laggards.

In contrast, Dr Reddy's, HDFC, PowerGrid, Kotak Mahindra Bank, HDFC Bank and Nestle were among the major gainers.

Among the top Nifty gainers were Dr Reddy’s Labs, Kotak Mahindra Bank, HDFC, Nestle India and HDFC Bank. Among the laggards were Divis Labs, Tech Mahindra, Grasim Industries, Hindalco Industries and HUL.

Palak Kothari, Research Associate, Choice Broking said, the Nifty has confirmed the shooting star kind of pattern on a daily time frame which indicates downside movement momentum for an upcoming session. Moreover, from the last 14 days Nifty has been trading in a range of 15,750-16,410 levels, either side breakout can direct further direction. In addition, Nifty has given a closing below 21-Day Moving Average which indicates weakness in the counter. However, the momentum indicators MACD & Stochastic were trading with a positive crossover & reversed from oversold zone on a daily chart which suggest a northward journey in the counter. The Nifty may find Strong support around 16,000 levels, while on the upside 16,300 may act as an immediate hurdle. On the other hand, Bank nifty has support at 33,600 levels while resistance at 34,800 levels.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd said, the cautious optimism seen in early trades failed to generate healthy gains as weakness in other Asian peers and pessimism in European gauges triggered last hour selling. Investors are waiting for the minutes of the US FOMC meeting, which will provide cues on the central bank's rate-hike direction going ahead. Also, there is a lot of skepticism amongst the investors over interest rate hikes in the near term and its impact on growth going ahead. On daily charts, the Nifty has formed a bearish candle, which is indicating further weakness in the near future. We are of the view that as long as the index is trading below 16,250, the correction wave is likely to continue. Below the same, it could retest the level of 16,000-15,050. On the flip side, post 16,250 breakout, the index could move up to 16,325-16,375, Chouhan added.

Prashanth Tapse, Vice President (Research), Mehta Equities Ltd, Amidst volatility, Nifty ended on a negative note, with India VIX flaring up 9.83 percent to 25.70 levels. Sectorally, Nifty Pharma and Nifty IT index which dropped around 1.5 percent each ahead of speech by Fed Chair Jerome Powell scheduled for Tuesday. The FOMC minutes is later on Wednesday, which shall provide cues on the central bank’s rate-hike path. The second reading of first quarter U.S GDP will trickle out on Thursday. Some part of nervousness in today’s trade was also due to RBI Governor Shaktikanta Das Monday’s statement that, ‘the market is “right in thinking” that the MPC wants to raise rates in the next meeting on June 8th. The technical picture has shifted to neutral following last two day’s uneven session. All bullish eyes will be on Nifty’s biggest hurdles at 16,411 mark. Expect a waterfall of selling only below the 15,971 mark, Tapse added.

Global markets decline

Exchanges in Europe were also trading lower in the afternoon trade. Stock markets in the US had ended higher on Monday.

Shares slid worldwide on Tuesday as fears about weak earnings and slowing growth punctured the recent mini-rally, while hawkish remarks from European Central Bank Chief Christine Lagarde reminded edgy markets that rate hikes loom. Nasdaq futures lost 2.06 percent, with traders blaming the earnings warning from Snap which saw shares in the Snapchat owner tumble 28 percent, while S&P 500 futures slipped 1.47 percent.

Asian markets in Hong Kong, Shanghai, Seoul and Tokyo ended lower. There was a 1.4 percent fall in MSCI's broadest index of Asia-Pacific shares outside Japan, while the benchmark STOXX index of European shares fell 1.1 percent. All major sectors fell, with utilities and commodity-linked stocks leading declines, as investors awaited May Purchasing Managers Index data due in the morning session for clues about the slowing economy, Reuters said.

Rupee slips 4 paise

The rupee slipped by 4 paise to close at 77.59 (provisional) against the US dollar on Tuesday, weighed down by a negative trend in domestic equities and unabated foreign fund outflows.

At the interbank foreign exchange market, the rupee opened lower at 77.56 against the greenback, and finally settled at 77.59, down 4 paise over its previous close.

Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd, said, the USDINR spot closed 6 paise higher at 77.58 as equity markets came under selling pressure and some corporate outflows were noted. "We suspect RBI intervention may have kept losses in check for the Rupee. Over the near term, USDINR can trade within a range of 77.30 and 77.80 levels on spot," she added.

FII data

Continuing their selling spree, foreign institutional investors offloaded shares worth a net ₹1,951.17 crore on Monday, as per stock exchange data.

Crude prices dip

International oil benchmark Brent crude dipped 0.46 per cent to USD 112.9 per barrel.

(With inputs from Reuters, Agencies)

RECENT STORIES

Fiscal Year 2024 Farewell: Sensex At 73,635.48 & Nifty Above 22,300 As Markets End In Green;...

Fiscal Year 2024 Farewell: Sensex At 73,635.48 & Nifty Above 22,300 As Markets End In Green;...

Tata Launches Nexon Smart+ Entry-Level AMT Variant, Prices Start At Rs 10 Lakh

Tata Launches Nexon Smart+ Entry-Level AMT Variant, Prices Start At Rs 10 Lakh

Attention Debit Card Holders, Your Maintenance Charges Are Set To Spike: THIS Bank Has Revised The...

Attention Debit Card Holders, Your Maintenance Charges Are Set To Spike: THIS Bank Has Revised The...

Rock Solid: Citroen Basalt Vision Revealed

Rock Solid: Citroen Basalt Vision Revealed

Trade With Speed: India Launches World's Fastest T+0 Trade Settlement; Check Out The 25 Listed...

Trade With Speed: India Launches World's Fastest T+0 Trade Settlement; Check Out The 25 Listed...