February 28, 2024

Among sectors, except IT all indices ended in the red.

The equity benchmarks plunged to their biggest single-day fall in 19 months as HDFC Bank’s disappointing Q3 show triggered a fall in the banking pack, roiling the market on January 17 amid weak global cues.

At close, the Sensex was down 1,628.01 points, or 2.23 percent, at 71,500.76, and the Nifty was down 460.30 points, or 2.09 percent, at 21,572, their worst day since June 16, 2022.

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Also Read – Sensex tanks 1,600 points, Nifty down 2%; 5 factors pulling the market down

Comments from US Federal Reserve Governor Christopher Waller dampened expectations of March rate cut, sending 10-year treasury yields and the dollar index higher, sending ripples across the market.

The market opened down on weak global cues and the selling pressure extended as the day progressed. Information technology stocks provided some support.

Stocks and sectors

HDFC Bank closed 8.2 percent down, its sharpest fall since March 30, 2020. The hammering of the heavyweight rippled across the banking pack, with all 12 Bank Nifty stocks closing in the red.

Bank Nifty slipped to a month’s low of 46,064, falling 4.3 precent, its largest drop in almost two years.

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Biggest Nifty losers were HDFC Bank, Tata Steel, Kotak Mahindra Bank, Axis Bank and Hindalco Industries, while gainers were HCL Technologies, SBI Life Insurance, Infosys, LTIMindtree and TCS.

Among sectors, except IT, all indices ended in the red. Auto, metal, oil & gas realty were down 1-2 percent. BSE midcap and smallcap indices shed a percent each.

The fall left investors poorer by Rs 4.55 lakh crore, as the BSE’s market capitalisation dropped to Rs 370.39 lakh crore from Rs 374.95 lakh crore in the previous session.

Also Read – HDFC Bank contributes 70% to fall in BSE Bankex, Nifty trades below 21,800

A short build-up was seen in Indian Energy Exchange, HDFC Bank and SAIL, while a long build-up was seen in ICICI Lombard General Insurance Company, Oracle Financial Services Software and Birlasoft.

Among individual stocks, a volume spike of more than 1,300 percent was seen in SAIL, Nestle India and BHEL.

More than 250 stocks, including BHEL, Birlasoft, Capri Global, Cochin Shipyard, Entertainment Network India, Ganesh Housing, Hercules Hoists, HUDCO, Ircon Internatinal, IRFC, Man Industries, MSTC, Rail Vikas Nigam, SJVN, TV18 Broadcast, touched their 52-week high. Click here for the full list

Outlook for January 18

Rupak De, Senior Technical Analyst, LKP Securities

The Nifty witnessed a significant decline driven by profit-taking,  which led the index to its 21-day exponential moving average (EMA), a crucial short-term moving average.

Sentiment can deteriorate further if the Nifty drops below 21,550, where the 21-EMA is situated. On the downside, a breach of 21,550 may result in the index slipping to 21,350. On the upside, resistance is at 21,650.

Bank Nifty experienced a sharp decline on selloff in HDFC Bank. The index sharply fell below the 38.20% Fibonacci Retracement level of the previous leg of rally (from 43,230 to 48,347).

The index also retreated within the area of the previous swing high after a consolidation breakdown on the daily chart. The sentiment may remain weak, with immediate support at 45,900-45,930.

A drop below 45,900 can lead to a further correction towards 45,500. On the upside, resistance is at 46,350.

Jatin Gedia, Technical Research Analyst,Sharekhan by BNP Paribas

On the daily charts, prices have witnessed a decisive break below the 20-day moving average (21,629), which is a sign of weakness. The daily momentum indicator has triggered a negative crossover, which is a sell signal. Thus, both price and momentum indicators are pointing toward weakness.

The ideal strategy to trade this fall would be sell-on-rise near the resistance zone of 21,800–21,820. On the downside, we expect the Nifty to target 21,167, which is the 40-day moving average. Below it, the Nifty can fall further to 20,870, which is the 38.2 percent Fibonacci retracement level of the rise the index witnessed from 18,837–22,124.

Bank Nifty has led the fall and decisively closed below the 40-day moving average (46,887), which is a sign of weakness. The daily momentum indicator has a sell signal. Thus, price and momentum indicator suggests weakness in the short term . We expect the the Bank Nifty to drift towards, 45,400, which coincides with the 20-week average and the 50 percent Fibonacci retracement level of the rise from 42,105 –48,636.

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