Nifty falls for 4th straight session; muted Q3 earnings hit sentiment

Caution ahead of the Union Budget, uninspiring quarterly earnings and mixed global cues continued keeping the Indian market under pressure as key equity indices Sensex and Nifty settled lower by half-a-percent on January 22.

Nifty closed in the red for the fourth consecutive session while Sensex extended the loss into the third consecutive day.

After registering a positive opening today, market benchmarks failed to hold the gains as investors stayed on the sidelines awaiting the Union Budget.

Besides, December quarter numbers of some bluechip companies and mixed global cues failed to infuse positivity into the market.

With a loss of 208 points or 0.50 percent, Sensex finished at 41,115.38, while Nifty closed the day at 12,106.90, down 63 points or 0.52 percent. BSE Midcap and Smallcap indices closed 0.32 percent and 0.13 percent lower, respectively.

“Banks, auto and mid-caps are consolidating due to marginal slippage in NPAs and earnings growth than anticipated earlier. The Q3 result had solid expectations but actual results are marginally below expectations for sectors like IT and Banks, this is impacting the market. A lot will depend on the actual outcome of Budget for further direction and the market is turning cautious before the big event,” said Vinod Nair, Head of Research at Geojit Financial Services.

Santosh Meena, Senior Analyst at TradingBells said the bullish texture of the market has been disturbed but bulls still have hope in 12,100-12,025 zone to come back.

“If Nifty manages to hold this zone then we can expect a pullback where 12,225-12,300 will be immediate supply zone. However, if Nifty slips below 12,100-12,025 zone then it may head towards 11,850-11,700 levels,” Meena said.

Top Nifty gainers: Zee Entertainment Enterprises, Grasim Industries, Nestle India

Top Nifty losers: ONGC, Coal India, NTPC

Stocks & sectors:

Most sectoral indices remained under pressure, with BSE Metal, Oil & Gas, Power and Utilities falling over a percent each. On the other hand, BSE Information Technology and Teck bucked the trend, logging gains of over a percent each.

Besides IT and Teck, BSE Telecom (up 0.24 percent), too, closed in the green.

As many as 222 stocks, including Jaiprakash Power Ventures, Weizmann and Hindustan Foods, hit their lower circuits. However, 191 stocks, including Reliance Capital, Reliance Infrastructure and Dishman Carbogen Amcis, hit their upper circuits on BSE.

Havells India, Indian Oil Corporation, Oil India and Reliance Capital featured among the 78 stocks that hit their fresh 52-week lows on BSE, while Bharti Airtel, Can Fin Homes, Dr Reddy’s Labs and Varun Beverages were among the 64 stocks that hit fresh 52-week highs.

Volume spike of 300-500 percent was seen in stocks like NTPC, Cadila Healthcare, Coal India and Wipro.

Long Build-up: Just Dial, Zee Entertainment, ICICI Prudential Life Insurance

Short Build-up: Oil India, Vodafone Idea, ONGC

Stocks in news:

After hitting a record high of Rs 524 in intraday trade, shares of Bharti Airtel pared gains to close marginally higher by 0.59 percent after the Department of Telecom approved raising foreign direct investment in the company to 100 percent from 49 percent allowed earlier.

Shares of Asian Paints closed nearly 2 percent lower after the company’s December quarter revenue failed to meet market estimates. Revenue from operations was at Rs 5,420.28, up 3 percent year-on-year, which was lower than Rs 5,662 crore estimated by a CNBC-TV18 analysts’ poll.

Shares of Fortis Healthcare rose almost 4 percent, extending gains into the third consecutive session, after ace investor Rakesh Jhunjhunwala increased his stake in the company during the quarter ended December 2019.

Man Infraconstruction share price rose nearly 2 percent after the company bagged a Rs 78.83-crore order from the government-run Indian Port Rail & Ropeway Corporation Limited.

UPL share price fell 2.52 percent as the income tax department searched the offices and manufacturing plants of the agrochemical company.

Technical view:

Nifty continued to consolidate in the range of 11,800-12,500. Market experts said since the index was trading near the upper band of the range, selling pressure has pushed the index towards 12,100 level.

After showing weakness within a small range in the last session, Nifty failed to sustain the opening intraday gains and closed the day lower.

“A long negative candle was formed today that has entered the crucial gap area of 12,044-12,132 levels of January 9. Technically, today’s pattern indicates a downtrend continuation pattern. The longer-term uptrend status like higher tops and bottoms is still intact. Nifty, sustaining above the support of 12,044 levels, could be a part of a higher bottom formation,” said Nagaraj Shetti, Technical Research Analyst, HDFC securities.

Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities believes the index is in a structural uptrend and the current correction is a buying opportunity.

“Volatility is expected to remain high on account of the upcoming Budget. Traders are advised to maintain a stop loss of 11,800 on Nifty and accumulate on longs. Investors can consider increasing positions in high-quality frontline and mid-cap stocks,” Agrawal said.Get access to India’s fastest growing financial subscriptions service Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the website or mobile app.