It was another session of U-turn by the benchmark equity indices, which opened with strong gains but settled with big cuts on Wednesday, slipping to their five-month lows. Headline indices settled in the red for fifth straight session as the global sentiments turned negative.
European shares dropped sharply during the session over negative news flow over Credit Suisse. Its largest shareholder, Saudi National Bank, ruled out further assistance amid the banking crisis in the US. Even its default swaps hit a record high, signaling a higher probability of default from the Zurich-based lender.
The 30-share pack BSE Sensex dropped about 920 points from day’s high to settle at 57,555.90, whereas NSE’s Nifty50 plunged almost 240 points from its intraday high to settle at 16,938.90. Nifty50 ended the session below the 17,000 mark for the first time since October 11.
The Nifty witnessed a gap-up opening however, it could not sustain at higher levels and ended the session down 70 points for the day. The key hourly moving averages placed at 17,200 acted as a stiff resistance. Nifty was not even able to surpass the previous trading session high, said Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas.
“It has achieved our short-term target of 16,950 and hence we revise it downwards to 16,750 which is the previous swing low. On the hourly charts, we can observe a positive divergence developing but it needs to be confirmed by a daily positive close. Hence, we shall assign more weightage to the price action as of now and continue to maintain our negative outlook on the index,” he said.
On a sectoral front, Nifty Metal index rose about 2 per cent, whereas the Pharma index also posted some gains. All other sectors ended lower. Nifty Bank dropped about a per cent, followed by Realty, Financial Services, FMCG and Auto indices.
A majority of the Adani Group stocks bucked broader market trends and settled with gains. Adani Enterprises jumped about 6 per cent, while Adani Green Energy and Adani Ports settled 4 per cent higher each. Adani Wilmar and Adani Transmission rose 3 per cent, each. Adani Power and Adani Total Gas were down 3 per cent, each.
Among other stocks in the Nifty50 pack, Asian Paints jumped over 3 per cent, whereas Tata Steel and Titan Company were up 2 per cent, each. On the contrary, Bharti Airtel, IndusInd Bank and Reliance Industries dropped 2 per cent, each. SBI, Hindustan Unilever, HDFC Bank, and Nestle were also among the top laggards.
The in-line data showing a decline in US inflation provided a gap-up opening in context with the global relief rally, bringing confidence that the Fed would not opt for a harsh rate hike following the turmoil in the banking sector, said Vinod Nair, Head of Research at Geojit Financial Services.
“Broader rate hike expectation has reduced from 50bps to 25bps and there are possibilities that the Fed may even consider not to hike in the March policy meeting. European markets fell on fears that the ECB would raise interest rates by at least 25 bps at its meeting on Thursday. High-interest rates remain a worry for the stock market,” he said.
A total of 3,643 shares were traded on BSE on Wednesday, of which 1,966 settled lower. 1,553 stocks ended the session with gains, while 124 shares remained unchanged. A total of 166 shares hit their upper circuit, whereas 208 tested the lower circuit levels for the day.
In the broader markets, Swan Energy dropped about 13 per cent on the back of profit booking. Brightcom Group declined over 7 per cent, while Poly Medicure and Sun Pharma Advanced Research Company shed 6 per cent, each.
On the other hand, KPIT Technologies surged 9 per cent to Rs 845.50 after the company announced its partnership with Honda Motors. NGL Fine-Chem gained 9 per cent. Chennai Petroleum, GR Infraprojects, Varroc Engineering and Foseco India jumped 7 per cent, each.
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