January 23, 2024
3 min
The Nifty 50 and Sensex, key benchmarks in the domestic market, faced significant losses on Tuesday, January 23, driven by a widespread selloff amid weak global cues. The downturn was not only extensive but also more pronounced in the midcap and smallcap segments, indicating deeper declines in those indices. Fragile market sentiment, largely influenced by disappointing December quarter earnings, has prompted investors to book profits amidst diminishing optimism about potential rate cuts in the US. This move is exacerbated by growing geopolitical tensions and heightened economic uncertainty in major global economies such as the US, China, and Europe.
Despite initially opening 145 points higher at 21,716.70, the Nifty experienced intraday volatility, reaching a high of 21,750.25 before plunging 379 points to a low of 21,192.60. The index ultimately closed with a substantial loss of 333 points or 1.54 percent, settling at 21,238.80.
Similarly, the Sensex commenced trading 445 points higher at 71,868.20 and surged by 616 points to an intraday high of 72,039.20. However, the index reversed all gains, dropping sharply by 1,189 points to an intraday low of 70,234.55. The Sensex concluded the session with a notable decline of 1,053 points or 1.47 percent, finishing at 70,370.55.
IndusInd Bank, Coal India, ONGC, Adani Ports, and SBI Life Insurance emerged as the top losers on the Nifty, whereas Cipla, Sun Pharma, Bharti Airtel, ICICI Bank, and Hero MotoCorp stood out as the leading gainers. Across sectoral indices, with the exception of pharma, all other sectors concluded the trading session in negative territory. The BSE Midcap and Smallcap indices each experienced a significant downturn, both declining by nearly 3 percent.
The Bank Nifty significantly contributed to the downtrend, with 11 out of its 12 stocks closing in the red. The banking index witnessed a sharp decline of 1,043 points or 2.26 percent, settling at 45,015, and displaying a bearish candlestick pattern on the daily charts.
Currently, the index is approximately 450 points shy of its crucial 200-day exponential moving average of 44,560, a level that holds significance for potential further downside.
A sharp decline of over 3 percent in the banking giant HDFC Bank, coupled with sell-offs in other banking stocks, pulled Nifty Bank below a crucial support level, setting the stage for potential further downside. With the exception of ICICI Bank, all constituents of the banking index closed in the red, driven by earnings reports from various lenders.
Nifty Bank experienced a substantial loss of about 1,043 points, equivalent to 2.26 percent, concluding at 45,015 points. At its lowest point during the day, the index witnessed a dip of over 1,200 points.
The Nifty index concluded with a substantial red candle, suggesting potential further declines to around 20,758 levels in the upcoming positional trades, while high volatility persists in the market. Bank Nifty, on the other hand, had previously identified positional support around the 44,894 level, which was accurately reversed. A sustained negative trend in Bank Nifty will only be confirmed if it closes below 44,894 on an end-of-day (EOD) basis.
PCR Analysis: Nifty PCR-OI has decreased with nifty has negative close which shows CALL WRITING.
Open Interest Analysis: Nifty future JAN contract OI has decreased with negative close which shows Long Unwinding.
Cost of Carry Analysis: Nifty JAN month contract has ended in low compare with FEB contract and negative range compare with previous session which indicates a negative bias.
India VIX Analysis: India VIX has closed at 14.85 vs 13.80 (DoD) basis which shows increase in volatility.
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