The Sensex and Nifty, India’s primary stock market indices, relinquished their early gains and slipped into negative territory on March 20, extending losses from the previous trading session.
By 11:02 am, the Sensex had declined by 155.32 points, or 0.22%, to reach 71,856.73, while the Nifty was down by 44.40 points, or 0.20%, standing at 21,773.10. Notably, among the listed stocks, 1,115 recorded gains, 2,011 faced declines, and 106 remained unchanged.
The broader market echoed the downward trend seen in the benchmark indices, with all sectoral indices experiencing losses.
In terms of sectoral trends, every sector registered declines, with notable pressure observed in Nifty PSU banks, metals, and media segments. Meanwhile, Nifty auto and IT sectors remained relatively stable, with marginal fluctuations.
Fundamental Analysis: Market Correction Amid Institutional Activity and Retail Profit-Booking
Despite significant institutional buying, evidenced by domestic institutional investors (DIIs) acquiring shares worth Rs 7,449 crore and foreign institutional investors (FIIs) investing Rs 1,421 crore, the Nifty experienced a correction of over one percent in the previous session.
The market sentiment was influenced by the bulk sale of TCS shares by Tata Sons, casting a shadow over institutional activities. However, a noteworthy factor contributing to the market downturn was profit-booking by High Net Worth Individuals (HNIs) and retail investors.
VK Vijayakumar, Chief Investment Strategist at Geojit, highlighted the role of retail profit-booking, accentuated by SEBI’s cautionary stance on elevated valuations within the broader market. This warning likely prompted retail investors to secure profits, adding downward pressure to the market.
In summary, while institutional buying remains robust, retail profit-booking and regulatory concerns regarding market valuations have led to a corrective phase in the market, shaping investor sentiment in the short term.
Investors are closely monitoring the US Federal Reserve’s upcoming rate decision, slated for later today, seeking insights that could steer global market trends. The Fed’s commentary holds particular significance as it influences the broader US market trajectory, which in turn impacts global sentiment.
According to reports from Bloomberg, the Federal Reserve is likely to maintain its current stance and refrain from signaling an imminent rate cut. Instead, the focus remains on managing persistent inflationary pressures while acknowledging a gradual uptick in unemployment rates.
At its two-day policy meeting, the Federal Open Market Committee (FOMC) is expected to uphold interest rates within the range of 5.25 percent to 5.5 percent, levels not seen in over two decades since their initial increase in July.
Bloomberg’s analysis underscores the Fed’s cautious approach, emphasizing that officials are reluctant to reduce borrowing costs until there is clear evidence of inflation approaching the target threshold of 2 percent, deemed optimal for a healthy economy. However, the recent uptick in the unemployment rate, reaching a two-year high, presents a dual challenge, necessitating a delicate balance between addressing inflation concerns and supporting labor market dynamics.
Technical Analysis:
According to Deven Mehata, a Research Analyst at Choice Broking, the Nifty experienced a gap-up opening and could find support levels at 21,800, followed by 21,750 and 21,700. On the upside, immediate resistance levels are seen at 21,900, followed by 21,950 and 22,000.
Key Nifty Gainers:
- Eicher Motors
- Maruti Suzuki
- Nestle India
- Bajaj Finance
- Bajaj Auto
Key Nifty Losers:
- Tata Motors
- Hindalco
- Tata Consumer
- Tata Steel
- UPL
Key Sensex Gainers:
- Maruti Suzuki
- Nestle India
- Bajaj Finance
- IndusInd Bank
- Power Grid
Key Sensex Losers:
- Tata Motors
- Tata Steel
- Sun Pharma
- HDFC Bank
- NTPC
Stock Movements:
Aurobindo Pharma: The share price rose nearly 2% in early trading following news of receiving approval from the US Food and Drug Administration (USFDA) for a nasal spray.
Eicher Motors: The stock surged over 4% in morning trading after brokerage firm UBS upgraded its rating to “buy,” projecting a 35% upside. The upgrade was attributed to new product launches and lackluster performance by peers.
Sources: moneycontrol.com
Disclaimer: The opinions and investment insights provided are intended solely for informational purposes and should not be construed as financial advice. Bystox.in strongly advises users to consult certified financial experts or professionals before making any investment decisions. We emphasize the importance of conducting thorough research and seeking personalized guidance tailored to individual financial goals and circumstances. Please be aware that investing involves inherent risks, and past performance is not indicative of future results. Bystox.in does not assume any responsibility or liability for the accuracy, completeness, or reliability of the information provided. Users are encouraged to exercise caution and diligence in their investment endeavors. Remember, your financial well-being is paramount, and seeking expert advice is highly recommended.