Taking Stock | Market extends losses; Sensex falls 311 points, Nifty ends around 17,850

Cipla, Adani Enterprises, Britannia Industries, BPCL and UPL were among the top Nifty losers on February 20

Cipla, Adani Enterprises, Britannia Industries, BPCL and UPL were among the top Nifty losers on February 20

The Indian equity market ended lower for the second consecutive session on February 20 with Sensex falling 311.03 points or 0.51 percent to 60,691.54 and Nifty losing 99.60 points or 0.56 percent to settle at 17,844.60.

After a flat-to-positive start, the market picked the momentum and remained in the green during the first half. However, selling across the sectors barring IT and auto, erased all the gains in the second half, dragging Nifty around 17,800, intraday.

“Stocks are getting beaten ahead of the release of Fed minutes on Wednesday. Maintaining its guard against inflation, the Fed is expected to remain hawkish. As expected, it is unlikely to have a dire effect on the global stock market,” said Vinod Nair, Head of Research at Geojit Financial Services.

“However, the consequence of constant high-interest rates is causing a slowdown in demand and the earnings outlook, hence the near-term trend will be cautious,” Nair added.

Stocks and Sectors

Cipla, Adani Enterprises, Britannia Industries, BPCL and UPL were among the top Nifty losers, while Divi’s Laboratories, UltraTech Cement, Tech Mahindra, Hindalco Industries and Power Grid Corporation gained the most.

Among sectors, except auto and information technology (up 0.5 percent), all other sectoral indices ended in the red with Nifty Bank, Energy and PSU Bank slipping 1 percent each. Metal and pharma were down 0.5 percent each.

Broader indices outperformed the benchmark indices with BSE midcap and smallcap ending on a flat note.

On the BSE, bank and oil & gas indices shed 1 percent each, while realty, power and healthcare indices were down 0.5 percent each. On the other hand, the information technology index gained 0.5 percent.

More than 150 stocks touched their 52-week low on the BSE, including Biocon, Adani Total Gas, Suven Life Sciences, Coffee Day Enterprises, Jyoti Structures, MT Educare, Emami, Vakrangee, Crompton Greaves Consumer Electricals, JBF Industries, Patel Engineering, Reliance Power,

Among individual stocks, a volume spike of more than 600 percent was seen in BHEL, Punjab National Bank and Samvardhana Motherson International.

A short build-up was seen in Adani Enterprises, Cipla and Vodafone Idea, while a long build-up was seen in Shree Cement, Persistent Systems and Coforge.

Outlook for February 20

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

Drubbing in banking stocks dragged down the markets today, which languished in the negative territory for a major part of the trading session. Factors such as more pain going ahead through further rate hikes, rising inflation, and the recent Adani saga continue to weigh on investors’ minds.

Additionally, Indian stocks are still expensive compared to China, and hence investors are taking this opportunity to curb their holdings. Technically, a bearish candle on daily charts is indicating further weakness from the current levels.

However, the Nifty is trading near the 20-day SMA and Sensex is trading near the important support level of 60,600. If the index succeeds to trade above 17,900, a quick pullback rally is not ruled out. Above this, it could move up to 18,000-18,125. On the flip side, a fresh selloff is possible only after the dismissal of 17,800 and below the same, the index could slip to 17,730-17,700.

Ajit Mishra, VP – Technical Research, Religare Broking

Markets started the week on a subdued note and lost over half a percent, in continuation of the recent fall. After the initial uptick, the Nifty index gradually drifted lower as the day progressed and settled closer to the day’s low.

The continuous pressure in the banking and financials pack combined with a downtick in the energy majors kept the tone negative. Meanwhile, the broader indices traded mixed and ended flat to marginally lower.

The underperformance of the banking and finance majors is largely weighing on sentiment, in absence of any major event. And, indications are pointing towards more pain in banking. However, resilience in the IT, auto and select FMCG heavyweights may cap the damage.

Besides, the upcoming monthly expiry of the February month derivatives contract would further add to the choppiness.

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