It’s a sea of red across Dalal Street with all the major indices closing in the red. The Fed impact was well and truly reflected the way the markets sold off last week’s gains. The Nifty closed below the 20,000 mark at 19,679, down almost a per cent. The Sensex too closed well below 67,000 at 66,230.24, down a whopping 500 plus points. Some of the key stars of last week like banks, autos and PSU entities saw broadbased selling.
Vinod Nair, Head of Research at Geojit Financial Services said “Domestic market declined following a hawkish stance by the Fed chair and prolonged high interest rate trajectory which is not positive for a slowing global economy. PSU Banks and Mid & Smallcaps were the worst hit due to stretched valuations and concern over moderation in yields. Rising oil prices and erratic rainfall further led investors to stay cautious in the market.”
The Bank Nifty saw sharp correction today and, in the process, has breached the 20- and 40-day moving averages. Gedia explains that this is a sign of weakness. “The daily momentum indicator has a negative crossover which is a sell signal. thus, both price and momentum indicators are suggesting a further decline. On the downside we expect it to target levels of 44500 – 44360 which coincides with the 20 week moving average and the 78.6% fibonacci retracement level.”
The top Index losers list includes the likes of M&M, Hero MotoCorp, Cipla, State Bank of India, IndusInd Bank. However, select Adani Group companies bucked the trend and gained nearly a percent.
Ajit Mishra, SVP – Technical Research, Religare Broking said, “Nifty has tested the short-term moving i.e. 20 EMA and also retraced almost fifty percent of the recent up move. It may take a breather now but the upside seems capped citing the underperformance of select heavyweights. We thus recommend staying stock-specific with a focus on risk management. “
The rupee closed at 83.06.