Market Carnage
Bank Nifty fell more than 4%, its largest drop since February 2022, with all 12 index components falling.
On January 17, HDFC Bank’s dismal Q3 result caused the banking pack to plummet, causing the Indian market to fall the most in 18 months amid weak global cues.
US Federal Reserve Governor Christopher Waller downplayed March rate cuts, raising 10-year treasury yields and the dollar index, dampening global mood.
It closed with the Sensex down 1,628.01 points, or 2.23 percent, at 71,500.76 and the Nifty down 460.30 points, or 2.09 percent, at 21,572.
The market opened down on weak global cues and sold off throughout the day. IT stocks helped.
Sectors and stocks
HDFC Bank, Tata Steel, Kotak Mahindra Bank, Axis Bank, and Hindalco Industries were Nifty losers, while HCL Technologies, SBI Life Insurance, Infosys, LTIMindtree, and TCS gained.
All sectors except IT ended in the red, with the bank index down 4% and auto, metal, oil & gas realty down 1-2 percent.
The BSE midcap and smallcap indices fell 1%.
Investors lost Rs 4.55 lakh crore in a day as the BSE’s market capitalization fell to Rs 370.39 lakh crore on January 17 from Rs 374.95 lakh crore.
Nifty Bank fell more than 4%, its worst drop since February 2022, and all 12 index companies fell.
Indian Energy Exchange, HDFC Bank, and SAIL built up short, while ICICI Lombard General Insurance, Oracle Financial Services Software, and Birlasoft built up long.
Stocks like SAIL, Nestle India, and BHEL saw volume spikes of 1300 percent.
More than 250 stocks, including BHEL, Birlasoft, Capri Global, Cochin Shipyard, Entertainment Network India, Ganesh Housing, Hercules Hoists, HUDCO, Ircon International, IRFC, Man Industries, MSTC, Rail Vikas Nigam, SJVN, TV18 Broadcast, reached 52-week high Click for the complete list.
Thursday Outlook
Profit-taking caused Nifty to fall from its record high of 22,124 the previous trading session. Profit booking on Wednesday sent the index to the critical 21-day Exponential Moving Average. If Nifty falls below 21,550, the 21EMA, sentiment could worsen. If 21,550 is broken, the index may fall to 21,350. Risers face resistance at 21,650.
Due to HDFC Bank selloff, Bank Nifty fell sharply. The index plummeted below the 38.20% Fibonacci Retracement level of the last surge (43,230 to 48,347). After a daily chart consolidation breakdown, the index retreated near the swing high. With immediate support at 45,900-45,930, sentiment may continue sluggish. A drop below 45,900 could cause a correction to 45,500. Upside resistance is 46,350.
The Nifty opened wide down and fell all day. 460 points down, it closed quite red. On the daily charts, prices broke below the 20-day moving average (21629), indicating weakness. A negative crossover on the daily momentum indicator signals a sell signal. Thus, price and momentum indicators indicate weakening. This decline, sell on rising near the resistance zone (21800–21820) is best. The Nifty may fall below 21167, the 40-day moving average, and 20870, the 38.2% Fibonacci retracement level of its rally from 18837 to 22124.
Bank Nifty led today’s loss. Due to the dip, the Nifty fell below its 40-day moving average (46887), indicating weakness. The daily momentum indicator sells. Thus, price and momentum indicate short-term weakness. The 20-week average and 50% Fibonacci retracement level of the rally from 42105 to 48636 are 45400, which we predict the Bank Nifty to reach.
| FII Bought | 656.57Â Â Cr |
| DII sold | 369.29Â Cr |
as per last trading session
Indian Market Stocks
| Sensex | -1,628.01 | -2.23% | 71,500.76 |
| Nifty 50 | -460.35 | –2.09% | 21,571.95 |
| Bank Nifty | -2,060.65 | -4.28% | 46,064.45 |
Market Movers
| HCL Tech | 20.45 1.31% | HDFC Bank | -141.65 -8.44% |
| SBI Life Insura | 12.35 0.88% | Tata Steel | -5.60 -4.08% |
| LTIMindtree | 39.70 0.64% | Kotak Mahindra | -68.35 -3.70% |
| TCS | 23.30 0.60% | Hindalco | -19.30 -3.33% |
| Infosys | 8.65 0.53% | Axis Bank | -36.80 -3.29% |
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For Nifty, the immediate resistance is around 22,050 and support at 21,500 and 21,400, Nada added.
For Bank Nifty 48,000 is a key obstacle, underlined by strong Call writing. A decisive breakout above the may unleash a rapid short-covering surge. Immediate support is at 47,200-47000, a break of which will probably prompt severe selling pressure, perhaps leading to a fall, he added.