February 22, 2024

On January 25, the Sensex was down 359.64 factors or 0.51 % at 70,700.67, and the Nifty was down 101.40 factors or 0.47 % at 21,352.60.

Benchmark indices the Sensex and the Nifty erased the day past’s as banks and IT shares once more got here below strain, with FII promoting and fading hopes of US charge cuts weighed on the sentiment.

At shut, the Sensex was down 359.64 factors or 0.51 % at 70,700.67, and the Nifty was down 101.40 factors or 0.47 % at 21,352.60. About 1,813 shares superior, 1,423 declined and 55 had been unchanged.

Story continues under Commercial

Within the broader market, the midcap indices corrected however the Nifty smallcap closed 0.5 % increased from the day past.

All sectoral indices, barring Nifty Realty, ended within the crimson. The monetary providers, pharma, financial institution, IT, FMCG and healthcare index settled over a % decrease.

The market will stay shut on January 26 on account of Republic Day.

Analysts blamed FII promoting, WTI oil spike and diminishing prospects of US charge cuts for the losses.

Comply with our market weblog to catch all of the stay updates

Was the correction anticipated?

Story continues under Commercial

“Market correction was the necessity of the hour on account of inflated valuations in a lot of the mid and small cap shares with no elementary and technical backing. The correction may be anticipated for a couple of extra classes resulting in the vote on account-Price range 2024,” stated Trivesh D, COO, Tradejini.

Information means that market tends to be bearish main as much as the price range and February has had a median fall of round 1.4 % over the past 10 years. This pattern is anticipated to proceed.

FII promoting dragging the markets

The sideways consolidation is anticipated to proceed within the subsequent few classes, stated analysts as promoting by overseas institutional buyers (FIIs) in the course of the week weighed on sentiment.

International institutional buyers (FIIs) maintained promoting strain within the money section for six days in a row, offloading shares price Rs 6,934.93 crore over the previous six classes. They’ve web offered shares price Rs 19,300 crore, up to now, this month.

“That is partly in response to the rising bond yields within the US the place the 10-year yield has risen to 4.16 % and partly because of the excessive valuation within the Indian inventory market,” stated VK Vijayakumar, Chief Funding Strategist, Geojit Monetary Companies.

Additionally Learn | Nifty, Sensex fall 1%; FII promoting, agency US yields amongst elements weighing on sentiment

India Inc’s Q3 outcomes had been under Avenue expectations. Most banks, led by sector heavyweight HDFC Financial institution, reported disappointing units of numbers.

The volatility ought to be utilized by buyers to rejig their portfolios, Vijayakumar stated. Banking pockets had been pretty valued and efficiency and prospects look good. “There may be worth in bluechips like HDFC Financial institution,” he stated.

Technical View

The help for the Nifty is at 21,100, whereas resistance at 21,400. A fall under the psychological degree of 21,000 will weaken the general pattern and buyers can anticipate additional slide, stated Vaishali Parekh, vice-president of technical analysis at Prabhudas Lilladher.

Volatility is anticipated to stay excessive because of the scheduled expiry of January month derivatives contracts and the prevailing earnings season.

Disclaimer: The views and funding suggestions expressed by funding consultants on Moneycontrol.com are their very own and never these of the web site or its administration. Moneycontrol.com advises customers to test with licensed consultants earlier than taking any funding choices.

Disclaimer: Moneycontrol is part of the Network18 group. Network18 is managed by Impartial Media Belief, of which Reliance Industries is the only real beneficiary.