Market Closing Bell: Nifty 50 falls for fourth consecutive session; rising US bond yields, crude oil weigh on sentiment
Nifty 50 closed with a loss of 68 points, or 0.34 per cent, at 19,674.25 while the Sensex ended at 66,009.15, down 221 points, or 0.33 per cent.
Nifty 50 and the Sensex, the two benchmark indices of the domestic stock market, ended in the red for the fourth consecutive session on Friday (September 22) amid weak global cues as the US Treasury yields rose to their multi-year high levels and crude oil prices rose by about a per cent, weighing on the appetite of investors for riskier equities.
The gains in the US Treasury yields, dollar and crude oil prices dealt a blow to market sentiment as investors tried to digest the possibility of one more rate hike by the US Fed by the end of this year.
As markets were expecting an end to rate hikes, the Fed's hawkish tone last Wednesday raised concerns about the potential impact of further hikes on the US economy.
The Fed maintained a pause on rate hikes this time. The Bank of England also left rates unchanged. The Bank of Japan (BOJ) kept its ultra-low interest rates on Friday and gave dovish guidance on future monetary policy.
Nifty 50 closed with a loss of 68 points, or 0.34 per cent, at 19,674.25 while the Sensex ended at 66,009.15, down 221 points, or 0.33 per cent.
Mid and smallcaps outperformed the benchmarks as the BSE Midcap index ended lower by 0.14 per cent while the BSE Smallcap index ended with a nominal gain of 0.04 per cent.
Nifty 50 fell 2.6 per cent for the week while the Sensex declined by 2.7 per cent. The BSE Midcap index lost 1.7 per cent and the Smallcap index fell 2 per cent for the week ended September 22.
The overall market capitalisation of the firms listed on BSE dropped to nearly ₹317.8 lakh crore from about ₹323.4 lakh crore on September 15, making investors poorer by about ₹5.6 lakh crore in a week.
Top Nifty 50 gainers today
Shares of IndusInd Bank (up 2.86 per cent), Maruti Suzuki India (up 2.61 per cent) and State Bank of India (SBI) (up 1.79 per cent) ended as the top gainers in the Nifty 50 index today.
Top Nifty 50 losers today
Shares of Wipro (down 2.44 per cent), Dr. Reddy's Laboratories (down 2.32 per cent) and UPL (down 1.83 per cent) ended as the top losers in the Nifty pack.
Sectoral indices today
Most sectoral indices ended with losses today. The Nifty Healthcare index fell 1.59 per cent, followed by the Nifty Pharma index which fell 1.55 per cent. Consumer Durables (down 0.81 per cent), Realty (down 0.66 per cent) and Metal (down 0.66 per cent) also lost significantly.
Nifty Bank index ended 0.03 per cent lower.
On the other hand, the Nifty PSU Bank index surged 3.51 per cent after JP Morgan decided to include Indian government bonds in its widely watched emerging-market debt index. The Nifty Auto index rose 0.21 per cent.
Experts' views on markets
"Domestic markets closed on a sombre note as mixed cues from US and Asian markets weakened domestic investors’ confidence. Nevertheless, PSU bank stocks outperformed as India's inclusion in JP Morgan's Government Bond Index led to a decline in bond yields. A broad basis, risk-averse sentiment prevailed due to the ongoing ascent of US bond yields and concern over higher rates for a prolonged period," said Vinod Nair, Head of Research at Geojit Financial Services.
“Downward spiral continued in the markets despite recovery in other Asian peers, as investors booked profits for the fourth straight session after the recent upsurge. While Indian market valuations have become expensive, other bigger concerns like rising crude oil prices, firm US Dollar index and treasury yields coupled with continuous FII selling have been denting the sentiment," said Amol Athawale, Vice President - Technical Research, Kotak Securities Ltd.
Technical views on Nifty 50
Athawale observed that on the weekly charts, the Nifty has formed a long bearish candle, indicating a weak sentiment in the near future. However, due to temporary oversold conditions, a quick pullback rally in the near future is possible.
"For the short-term traders now, the 50-day SMA (simple moving average) 19,600 and 19,500 would be the key support zones while 19,800 and 19,900 could be key resistance areas," said Athawale.
Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas pointed out that the Nifty is currently trading at a crucial support zone 19,720 – 19,620 where support parameters in the form of 40 moving average and key Fibonacci retracement level are placed.
"The speed of the fall has slowed down as the hourly momentum indicator has a positive crossover which indicates that a pullback is likely before the next leg of the fall resumes. The pullback can be till 19,850 – 19,880 where key hourly moving averages and the gap area formed on September 21 are placed. In terms of levels, 19,620 – 19,604 is the crucial support zone while 19,850 – 19,880 should act as an immediate hurdle zone," said Gedia.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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