Indian markets erased previous gains in two consecutive days of selling, ending the week on a negative note. On Friday, Sensex and Nifty 50 witnessed their biggest single-day losses of the current week, down around 1% each. Broad-based selling was seen across the board with banking stocks falling the most. The fall in equities can be attributed to weak global cues, which took a beating just after the Fed chair signaled further and higher rate hikes.
The Sensex closed 671.15 points or 1.12% down at 59,135.13. While the Nifty 50 fell 172.85 points or 0.98% to close at 17,416.75 on Friday.
Bank Nifty closed at 40,510.10, down 746.65 points or 1.81%. On the BSE, the Bankex index fell 863.22 points or 1.85%. Capital goods, IT and financial services stocks also saw heavy losses.
HDFC Bank, SBI, HDFC and IndusInd Bank emerged as top losers on Friday, falling 2-3% each. Besides, IndusInd Bank, Axis Bank, Bajaj Finserv, M&M, L&T, Reliance Industries, ICICI Bank and Kotak Bank dragged the market down by 1-2% each.
On the positive front, Tata Motors was the top gainer followed by Maruti Suzuki and NTPC.
Amol Athawale, Deputy Vice-President – Technical Research, Kotak Securities said, “Markets declined for the second consecutive session on weak global cues and banking stocks were the top gainers. Fed statement to keep inflation under control.” More rate hikes are planned, further fueling fears of a recession.
For the current week, the Sensex fell nearly 310 points or 0.52%, while the Nifty 50 fell 54.40 points or 0.31%.
At the interbank forex market, the rupee closed broadly lower than last week. The currency managed to avoid heavy losses among Asian peers as the dollar index strengthened on rate hike fears.
On Friday, the rupee closed at 82.04 per dollar against the previous day’s 81.9750. For the week, the rupee ranged from 81.60 to 82.30 — and closed with an overall gain of just 0.1%.
Going forward, Athawale said, technically, Nifty has formed a strong bearish candle on the weekly chart and it is trading comfortably below the 20 and 50-day SMAs. For positional traders, 17550 will act as medium term resistance zone and below this, the index could slide further towards 17150. On the other hand, if the index trades above 17425 and is likely to move higher, a minor pullback rally is possible. 17480-17500. Meanwhile, Bank Nifty also broke the important support level of 41000 or 20-day SMA (Simple Moving Average), which is broadly in the downside. Below this, Bank Nifty may retest 40000-39800 levels.
While on the weekly chart, a lower lower candle was formed indicating a longer rejection from last week’s positive candle and shows a short-term target of around 17,261 for the next week, said Rohan Shah – Principal Technical Analyst at Stoxbox. Intraday traders can only look for long opportunities above the resistance level of 17,470 if it holds for 15 minutes. Traders can look for fresh shorts only when Nifty breaks 17,300 level and stays below for 15 minutes to ensure short.
Disclaimer: The views and recommendations given above are of individual analysts or broking companies and not of Mint. We advise investors to do due diligence with certified experts before making any investment decision.
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