Sensex, Nifty snap six-day winning streak. Key factors weighing on Dalal Street
NSE's Nifty50, which scaled new high of 22,249.40 during the session, dropped 141.90 points to end the session at 22,055.05.
- Feb 21, 2024,
- Updated Feb 21, 2024 4:15 PM IST
Domestic equity market snapped its six-day winning run on Wednesday and settled sharply lower for the day on the back of profit booking. Weak global signals ahead of the US Fed's minutes of meeting due later today weighed on market sentiments.
BSE Sensex gyrated in the range of 820 points but finally settled at 72,623.09, falling 434.31 points, or 0.59 per cent lower. NSE's Nifty50, which scaled new high of 22,249.40 during the session, dropped 141.90 points, or 0.64 per cent, to end the session at 22,055.05. Broader markets underperformed as BSE midcap index was down 1.25 per cent, while smallcap index shed 0.85 per cent.
The Indian market is facing stiff resistance at higher levels; the valuation of a broader index is at a significant premium, leading to an unfavourable risk reward, which influences investors to book profits, said Vinod Nair, Head of Research, Geojit Financial Services. Here are the key factors that weighed on market sentiment today:
US Fed minutes of meeting The US Federal Reserve will release its January FOMC minutes of meeting later today. The traders community across the globe will be looking at how dovish or hawkish the Fed officials have been in the recent months, throwing some light on anticipated rate cuts later this year.
"Global markets treaded cautiously awaiting the US FED minutes, while Chinese markets were buoyed by policy interventions. Concerns lingered since investors were heavily betting on a US FED rate cut, which is put at risk by January's higher-than-expected inflation," said Nair from Geojit.
Profit booking Headline indices saw a strong upisde in the last six session, which began the seven one on a strong but saw profit booking in the fag end. BSE Sensex surged about 2,200 points during the period, while NSE's Nifty50 index was just shy of 22,250-mark, adding more than 14.46 lakh crore in the investors kitty. Profit booking was on the cards.
Selling pressure in index heavyweights including HDFC Bank, Infoys, Larsen & Toubro, Tata Consultancy Services, ITC and Kotak Mahindra Bank dragged the markets lower.
Prashanth Tapse, Senior VP (Research), Mehta Equities said that investors turned cautious ahead of the outcome of the minutes of the US Fed's last meeting as profit-taking in IT, oil & gas, power and metals saw markets snap its 6-session winning streak.
Global markets Global shares eased on Wednesday ahead of earnings from Nvidia, which many are hoping will help justify the hype around 2024's AI-driven rally, and ahead of minutes of the Federal Reserve's January meeting. Stocks in Europe opened down for the day.
Firm US dollar The dollar inched up on Wednesday as traders awaited minutes of the Federal Reserve's latest policy meeting for further clues on the central bank's rate outlook. The US dollar index edged 0.1 per cent higher to 104.17 on the back of a dip in global bond yields.
Data last week showed sticky US inflation, prompting investors to push back bets the Fed would start cutting rates in March. Markets are now pricing in the first cut in June, compared with March at the start of the year.
Technical view The Nifty has formed a bearish engulfing pattern on the daily chart, indicating a potential pause in the ongoing rally, said Rupak De, Senior Technical Analyst, LKP Securities. "The momentum indicator RSI is showing a bearish crossover, signaling weakness in the near term. Immediate support is positioned at 22,000; a decisive drop below this level could lead the index towards 21,700. On the upside, resistance is identified at 22,160," he added.
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Domestic equity market snapped its six-day winning run on Wednesday and settled sharply lower for the day on the back of profit booking. Weak global signals ahead of the US Fed's minutes of meeting due later today weighed on market sentiments.
BSE Sensex gyrated in the range of 820 points but finally settled at 72,623.09, falling 434.31 points, or 0.59 per cent lower. NSE's Nifty50, which scaled new high of 22,249.40 during the session, dropped 141.90 points, or 0.64 per cent, to end the session at 22,055.05. Broader markets underperformed as BSE midcap index was down 1.25 per cent, while smallcap index shed 0.85 per cent.
The Indian market is facing stiff resistance at higher levels; the valuation of a broader index is at a significant premium, leading to an unfavourable risk reward, which influences investors to book profits, said Vinod Nair, Head of Research, Geojit Financial Services. Here are the key factors that weighed on market sentiment today:
US Fed minutes of meeting The US Federal Reserve will release its January FOMC minutes of meeting later today. The traders community across the globe will be looking at how dovish or hawkish the Fed officials have been in the recent months, throwing some light on anticipated rate cuts later this year.
"Global markets treaded cautiously awaiting the US FED minutes, while Chinese markets were buoyed by policy interventions. Concerns lingered since investors were heavily betting on a US FED rate cut, which is put at risk by January's higher-than-expected inflation," said Nair from Geojit.
Profit booking Headline indices saw a strong upisde in the last six session, which began the seven one on a strong but saw profit booking in the fag end. BSE Sensex surged about 2,200 points during the period, while NSE's Nifty50 index was just shy of 22,250-mark, adding more than 14.46 lakh crore in the investors kitty. Profit booking was on the cards.
Selling pressure in index heavyweights including HDFC Bank, Infoys, Larsen & Toubro, Tata Consultancy Services, ITC and Kotak Mahindra Bank dragged the markets lower.
Prashanth Tapse, Senior VP (Research), Mehta Equities said that investors turned cautious ahead of the outcome of the minutes of the US Fed's last meeting as profit-taking in IT, oil & gas, power and metals saw markets snap its 6-session winning streak.
Global markets Global shares eased on Wednesday ahead of earnings from Nvidia, which many are hoping will help justify the hype around 2024's AI-driven rally, and ahead of minutes of the Federal Reserve's January meeting. Stocks in Europe opened down for the day.
Firm US dollar The dollar inched up on Wednesday as traders awaited minutes of the Federal Reserve's latest policy meeting for further clues on the central bank's rate outlook. The US dollar index edged 0.1 per cent higher to 104.17 on the back of a dip in global bond yields.
Data last week showed sticky US inflation, prompting investors to push back bets the Fed would start cutting rates in March. Markets are now pricing in the first cut in June, compared with March at the start of the year.
Technical view The Nifty has formed a bearish engulfing pattern on the daily chart, indicating a potential pause in the ongoing rally, said Rupak De, Senior Technical Analyst, LKP Securities. "The momentum indicator RSI is showing a bearish crossover, signaling weakness in the near term. Immediate support is positioned at 22,000; a decisive drop below this level could lead the index towards 21,700. On the upside, resistance is identified at 22,160," he added.
Also read: Stock recommendations by analysts for February 21: Gujarat Alkalies, PNB and SBI Life
Also read: Eureka Forbes shares end 4% higher amid block deal buzz