At close on Friday, the Sensex was down 651.85 points or 1.08 per cent at 59,646.15 while its broader peer the Nifty was down 198 points or 1.10 per cent at 17,758.50
Indian benchmark indices snapped their 8-day winning streak and ended in red at close on Friday. The fall is mainly attributed to some profit booking witnessed during the trade and some other global macroeconomic headwinds.
At close, the Sensex was down 651.85 points or 1.08 per cent at 59,646.15 while its broader peer the Nifty was down 198 points or 1.10 per cent at 17,758.50.mExcept capital goods and Power all major sectoral indices ended in red. On the Nifty, Adani Ports, L&T, Infosys, Eicher Motors and Bajaj Auto were among top gainers. IndusInd Bank, Apollo Hospitals, Bajaj Finserv, Tata Motors and Hindalco Industries were among top losers.
“Interest rate sensitives such as banking, auto & realty stocks witnessed heavy profit-taking and halted benchmark indices’ 7-day winning streak. Investors pressed the sell button after the recent US FOMC minutes indicated that the Federal Reserve may go for rate hikes in its next meeting, which prompted local investors to prune their holdings after the recent run-up,” said Amol Athawale, Deputy Vice President – Technical Research, Kotak Securities
A key macroeconomic factor that took the bulls by surprise was the resurgence in the US dollar index. The US Dollar index surged to a one-month high of 107.6 against a basket of major currencies amid comments by US Federal Reserve members that did little to support market’s optimism for slower interest rate hikes going ahead. A strong dollar is negative for emerging market equities like India as it triggers capital outflows.
Also, heavy selling was witnessed in Reliance Industries’ shares as late on Thursday the government hiked the windfall tax on the export of diesel to Rs 7 per litre and brought back duty on export of jet fuel. A few banking names also saw selling including ICICI Bank, HDFC Bank, SBI, IndusInd Bank. Bajaj Twins – Bajaj Finserv and Bajaj Finance also slid over 2 per cent each.
“Technically, the Nifty witnessed profit booking near 18000 level, while on daily charts, the index has formed a long bearish candle and also broke the important support level of 17850 which is broadly negative. In addition, it has also formed Hammer candlestick formation indicating further weakness in the near future,” said Athawale. The selling on Friday was seen when the Nifty50 was around the 18,000 level, suggesting traders were jittery near the key mark.
“Below 17900, the correction formation is likely to continue and could retest the level of 17600-17500. On the flip side, 17900 – 17950 would act as an immediate hurdle for the bulls. A fresh uptrend is possible only if the index clears the resistance of 17950, which could then take it further to 18050-18150 level,” added Athawale.