Markets record broad-based selling as focus shifts to RBI policy

Sensex ended at 57,613.72 down by 40.14 points or 0.07%. While Nifty 50 closed at 16,951.70 lower by 34 points or 0.2%.

Top gainers on Sensex were — IndusInd Bank, Power Grid, HDFC Bank, ICICI Bank, and HDFC.

Top losers on Sensex were — Tech Mahindra, Tata Motors, Bharti Airtel, Wipro, Bajaj Finserv, HCL Tech, and Bajaj Finance shedding between 1% to 3%.

In the broader market, Smallcap index on BSE shed over 207 points and the Midcap index dipped near 100 points. Also, BSE Sensex Next 50 tumbled by over 301 points.

In regards to sectoral indices, on BSE, the IT index slipped over 237 points, while the Auto dropped by 229 points, Capital Goods lower by 262 points and the Oil & Gas index dipped by 164 points. Except for Bankex which surged over 148 points, all the other indices were in the red.

Vinod Nair, Head of Research at Geojit Financial Services said, “Indian markets continued to stay in the grip of bears as investors remained cautious in expectation of further tightening from the RBI. While global market sentiment has been improving as the fears of broader contagion from the banking turmoil fade. Back home, nifty small and midcap stocks continued to underperform due to fall in investors’ risk appetite and FY23 tax harvesting.”

Meanwhile, the rupee further strengthened against the US dollar as the rescue of failed or embattled banks through mergers and acquisitions abated the fears of contagion. Also, fiscal FY23-related factors further lifted the mood in the rupee. The local currency tracked positive gains in Asian peers against the dollar, to end at 82.1875 on Tuesday compared to the previous closing of 82.37 per dollar.

On the rupee, Jateen Trivedi, VP Research Analyst at LKP Securities said, rupee traded positive as dollar index weakness helped the rupee an inch high above 82.20. The banking relief in the US on the back of SVB taken over by First Citizens Bank kept dollar prices weak helping rupee gains. Volatile range shall continue in rupee as 82.00 remains a strong hurdle for the rupee in near term. And 82.55 near term support.

RBI will begin its 3-days monetary policy meeting on April 3rd and the outcome in key rates and economic outlook will be announced on April 6th.

Further, India Inc will commence the announcement of Q4FY23 results from April month. Major IT companies such as TCS and Infosys are likely to kick start the fourth quarter earnings season.

Going ahead, Ajit Mishra, VP – of Technical Research, Religare Broking said, “we expect volatility to remain high due to the scheduled expiry of March month derivatives contracts. On the index front, participants have been trying to defend 16,900 in Nifty for the last three sessions and its breakdown may trigger a sharp reaction on the downside. Needless to say, the recent sell-off in the broader indices may deteriorate further. We thus reiterate our view to limit trade and maintain positions on both sides.”

For Wednesday, Rohan Shah, head technical analyst at Stoxbox said, “intraday traders can look for long opportunities only above the resistance level of 17,110 if the closing comes above 17,110 in 15 min chart. Traders can look for fresh shorts only if nifty breaks the 16,900 level & remains below for 15 min to ensure short.”

On Nifty 50, Rupak De, Senior Technical Analyst at LKP Securities also said, the index remained mostly range bound as the market participants stayed low. The benchmark Nifty continued to remain below the critical moving average. The momentum oscillator is in bearish crossover, indicating bearish momentum. Going forward, the sentiment is likely to remain weak until it remains below 17250. Sell on rally will most likely remain popular among the traders. On the lower end, 16950–16900 may act as immediate support, below which the index may fall down to 16750 over the short term.

While for Bank Nifty, Kunal Shah, Senior Technical & Derivatives Analyst at LKP Securities said, the fight between the bears and the bulls continued in the Bank Nifty index ahead of the monthly expiry. The index is stuck in a broad range between 39,000-40,000 where a significant amount of call and put writing is visible on the monthly expiry. The index once breaks out of this range will witness a directional move.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.