Sensex and Nifty ended on a bearish note on Thursday backed by weak global equities amid rising concerns about economic recovery from the COVID-19 pandemic. Erasing 2 days of gains, the 30-share benchmark BSE Sensex closed 323 points lower at 38,979 and NSE Nifty 50 fell 85 points to 11,519. Yesterday, Sensex ended 258 points higher at 39,302 and Nifty 50 closed 82 points higher at 11,604.
Domestic benchmarks reversed the trend and fell today, weighed by losses in index heavyweights Reliance Industries and HDFC twins. ICICI Bank, HDFC Bank, PowerGrid, Bajaj Auto, Kotak Bank, Axis Bank and L&T were among the top losers on the Sensex pack. On the other hand, HCL Tech, Tech Mahindra, Asian Paints, ONGC and Infosys were among the gainers.
Sectorally, except pharma, IT and media scrips, all the other sectors ended in red territory, with over 1% fall in realty, banking and financials.
Overseas, equity markets traded mostly lower after FOMC said it would likely hold rates near zero until 2023 given the current inflation and employment situation. The US central bank kept a dovish policy, although hinted to be reluctant in adding stimulus in one of the world's largest economy, hit severely by the pandemic.
The Federal Reserve vowed to keep interest rates near zero for a prolonged period until inflation is on track to overshoot the US central bank's 2% target. It, however, announced no additional stimulus plans to shore up a battered US economy. The Bank of Japan and the Bank of England will also announce their respective policy decisions on Thursday.
In its updated Economic Projections, the FOMC said it expects the gross domestic product (GDP) to contract at a softer pace than the previous forecast of 6.5% in 2020 and sees unemployment at 7.6% at year's end.
Anuj Gupta - DVP- Commodities and Currencies Research, Angel Broking said, "Federal Reserve pledged to keep interest rates low for a long time but stopped short of offering further on stimulus to shore up a battered US economy."
Vinod Nair, Head of Research at Geojit Financial Services said,"Indian markets reacted in sync with global markets, after the US Fed reserve failed to keep up with the expectations of the investors. In spite of the pledge to keep interest rates low, markets were disappointed on the lack of further inputs or immediate stimulus measures. Continued border tensions with China, also worried Indian markets".
"Global cues were negative as Dow Futures, Nasdaq Futures and FTSE were down by 0.97%, 1.03% and 0.79% respectively," said Keshav Lahoti-Associate Equity Analyst, Angel Broking.
Indian rupee, the domestic currency benchmark closed at 73.66 against the US currency, registering a fall of 14 paise over its last close of 73.52 per US dollar.
As per Geojit Financial Services, For USDINR, 73.83 and 74.05 may act as crucial levels in the upside while 73.48 and 73.25 will act as support levels.
On Nifty's near-term technicals, Aamar Deo Singh-Head Advisory, Angel Broking said," It appears that Nifty is unable to breach and hold above the 11600 mark, which is a crucial resistance. The overall uptrend remains intact, but for any meaningful rally towards 11750-11800 zone, 11600 level needs to be overcome. On the downside, 11200-11300 is a key zone of support."
Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking said, "With a broader view also, we are a bit unsure whether the Nifty has enough strength to go pass the sturdy wall of 11650-11680. For the coming session, 11620-11650-11680 continues to be a strong resistance zone and we advise traders not get carried away by last 2-3 days' upmove. As far as supports are concerned, 11570-11540 would be seen as intraday supports and a move below 11540 would give early signs of weakness."
Rising coronavirus cases continue to impact the stock market. Worldwide, total confirmed cases crossed a major threshold of 300.36 lakh and 9.45 lakh deaths from COVID-19 outbreak. Meanwhile, India's death toll from COVID-19 infections rose to 0.83 lakh and total coronavirus cases climbed to 51.18 lakh as of Thursday.
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