Post Market Analysis of Equity Sensex

Equity benchmarks Sensex slipped nearly 500 points and plunged 1400 points in the last two days tracking global peers after investors fretted over hawkish comments from major central banks. There was sharp declined across the global between 2-3% after following a 50 bps rate hike and hawkish message from the US Fed on 14th, the ECB and BoE also hiked rates on 15th by 50 bps each and delivered, a more hawkish message than the Fed. This synchronised rate hike cycle have negative impact on the global markets.

Sensex slumped 461 points, or 0.8%, to close at 61,338, while the Nifty slid 146 points, or 0.8,%, to close at 18,269. Auto, metal, banking and IT stocks were major losers today while sugar and fertilizer stocks among the major gainers. India Vix advance 2% to close at above 14.

Among the global markets, both Asian and European market slipped and US Future dropped 1% amid concern over resolve of central banks to continue their fight against inflation will tip the economy into a recession. Yesterday, European Central Bank, Bank of England and Swiss National Bank each raising their interest rate by a 50bps (inline with expectation) but concern of hawkish commentary announced by the ECB and other European Banks. ECB said it expects to raise interest rates further and increased its forecasts for inflation for the next two years. There was negative sentiment in the global market after the US Federal Reserve and the European Central Bank warning of more pain to come

Tech stocks declined sharply after global IT major index Nasdaq Composite nosedived over 3% yesterday. Concern of slowing global growth and tech major HCL Tech lower FY23 growth have negative impact on tech stocks. Nifty IT index slipped 1.5%. Tech major TCS fell 2% to close at Rs3240. Persistent Systems, Mphasis, LTTS, Wipro, Infosys and HCL Tech declined 1-3%

Psu Bank Index slipped by 3% due to profit booking. PNB slipped 4% to close at Rs57. Union Bank, Bank of Baroda, Bank of India IOB slipped 3-6%. Among the private bank, Kotak Bank, Bandhan Bank, Indusind bank and ICICI Bank declined 1-2%. However, HDFC Bank managed to ended positive territory.

Sugar stocks witnessed fresh buying after the news that the government will consider allowing additional sugar exports from next month (January 2023). Balrampur Chini gained 2% to close at Rs394. Both EID Parry and Renuka Sugar gained over 3% each.

Fertilizer stocks gained in the last two days due to surged in fertilizers prices owing to the Russia-Ukraine war. Fertilizer & Chemical locked 20% upper circuit to close at Rs268. It has gained 40% in the two trading sessions. Other fertilizer stocks like NFL surged 14% to close at Rs78.

Technical Outlook:

Nifty index opened negative and moved in wild swings within 180 points during the day. It witnessed some recovery but failed to surpass key hurdle of 18442 zones and tumbled down from higher levels. It broke its immediate support of 18350 and closed with losses of around 150 points. It formed a Bearish candle on daily scale with long upper shadow indicating pressure at higher zones. It formed a Bearish candle on weekly frame and negated its higher lows of the last two weeks. Now, till it holds below 18350, weakness could be seen towards 18081 and 18000 zones whereas hurdles are placed at 18350 and 18442 zones.