Market halted after 9 days of rally; IT stocks hit hardest after TCS, Infosys Q4 losses

Sensex It finally closed at 59,910.75, down 520.25 points or 0.86%. The Nifty 50 closed 121.15 points or 0.68% down at 17,706.85. India’s volatility index rose over 3.2%.

Infosys was the top gainer in the Sensex, falling over 9%. Tech Mahindra and HCL Tech followed with losses of 5.3% and 2.7%. Other stocks such as NTPC, L&T, Wipro, HDFC, TCS and HDFC Bank were also among the losers on the Sensex, sliding in the range of 1.5% to 2%.

Top gainers on Sensex were Nestle, up 4%, followed by Power Grid, SBI, Kotak Bank, IndusInd Bank, UltraTech Cement and ITC.

The m-cap of BSE-listed firms was approx. 265.93 lakh crore by the end of Monday’s session. Of the total 3,768 scrips listed on BSE, 1,852 advanced, 1,735 declined and 181 remained unchanged. On Monday, 139 scrips touched a 52-week high, while 55 scrips hit a 52-week low.

In the broader market, BSE Midcap outperformed the benchmark with a gain of around 138 points or 0.6%. There has also been a slight rise in the Smallcap index. The BSE Sensex 50 declined 0.7%, while the Next 50 gained 0.4%.

Moreover, with respect to sectoral indices, BSE IT index fell by 1348 points or 4.8%. Capital Goods rolled 232.5 points and Healthcare index 108 points. The gainers were the FMCG index, with a gain of about 163 points, and the Oil & Gas index, which was up by 212 points or 1.2%.

IT stocks are under pressure following disappointing fourth quarter results from top-tier IT companies, TCS and Infosys, which missed street estimates amid uncertainties. Many experts believe that due to the banking crisis in US regional banks and European banks, there is likely to be turmoil in 1-2 quarters for the sector. Nifty IT touched a 52-week low of 26,184.45 and closed at 27,008.20, down 1,335 points or 4.7%. All IT stocks are in red mark on Monday.

“Markets reacted negatively to a weak start to the earnings season from IT bellwesters and their cautious outlook,” said Vinod Nair, head of research at Geojit Financial Services. On the global front, US 10-year bond yields edged up as strong US jobs The data raised concerns over further rate hikes by the Fed.”

Meanwhile, at the interbank forex market, the Indian rupee weakened against the greenback tracking sell-off in domestic equities along with gains in the dollar and rise in treasury yields following a mixed data on the US dollar. The local unit closed at 81.9725 against the previous session’s print of 81.85 per dollar.

Going forward, Nair said, “Earnings reports, mainly from IT and banking sectors, will influence the market trend in coming days. We expect Nifty 50 earnings to grow by 10% in Q4FY23 , which will be driven by banking and finance, auto, telecom. , and FMCG.”

Rohan Patil, Technical Analyst, Samco Securities, said on Nifty 50 outlook, “On the daily chart the index has retrieved its channel pattern breakout level at 17,650 and has managed to hold it.”

Technically, Patil said, “The long bearish candle post breakout suggests range bound movement in further trading sessions. The overall trend is positive as the prices are trading above the breakout level of the descending channel pattern. Nifty’s Support is placed near 17,600- 17,550 levels and resistance is capped near 17,900 levels.If Nifty breaks below 17,550 levels then 17,400 will be the next support zone.

For the rupee, Jatin Trivedi, VP Research Analyst, LKP Securities said, “Rupee will take cues from FII activity, thus a range bound trend line between 81.75-82.25 looks on the cards for the coming week.”

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