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Domestic equity markets opened lower on Thursday and extended their losses as the session progressed on the back of muted global cues. Asian peers were down, while US stocks fell sharply after the US Federal Reserve increased interest rates by 25 basis points bps At 9.25 am, the 30 share pack of BSE Sensex was trading 306.21 points, or 0.53 per cent, lower than 57,908. The Nifty 50 of the NSE dropped 78.40 points, or 0.46 per cent, to 17,073. Broader markets outperformed the headline peers but were trading with mild cuts. India VIX was slightly slowed to 14.78 level, as a result of the fear gauge.
The closing was lower than opening levels but the index formed higher tops and higher bottoms for the third straight session, and has formed a bearish candle on the daily chart. The momentum oscillator relative strength index is in a bullish crossover that indicates positive bias, said YES Securities in its morning note.
The index has to cross and sustain above 17,255 levels to extend up to 17,460 levels at 200 DMA s. Till then, the levels of 17,000 followed by 16,800 could act as support, it added.
Only the Nifty Pharma index was able to hold some gains among the sectors. The Nifty Index topped among the laggards, followed by the PSU Bank counters. Financial Services, Private Banking Stocks and FMCG were the other key losers.
Asian Paints fell about 3 per cent among the losers in the Nifty 50 pack. In early trade, blue-chip IT stocks including HCL Tech, Wipro and Infosys dropped by 2 per cent. UPL, Power Grid, HDFC and Reliance Industries were down a per cent.
IndusInd Bank, HDFC Bank and Hero MotoCorp were all up to a per cent, each. Adani Ports and Larsen Toubro, Divis Labs and Sun Pharma were the key gainers in the barometer of the NSE.
The Fed is trying to balance inflation control with financial stability. The late-day sell-off was caused by Treasury Secretary Janet Yellen s comment that they are not considering blanket deposit insurance, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
This kind of gyrations happen in a highly volatile whipsawing market driven by daily doses of news. The Fed has signalled a rate hike this year and then pause. In the current context of high interest rates, investors need to expect only moderate returns from the market, he said.
In the broader markets, Hindustan Aeronautics plunged more than 6 per cent as the government began to sell up to 1.75 per cent 58.51 lakh equity shares via offer-for-sale OFS on March 23 and March 24 at a floor price of Rs 2,450 per share. AGI Greenpac and Vakrangee declined 5 per cent, each.
Precision Wire Systems gained 9 per cent, whereas Sirca Paints India surged 7 per cent as the paint maker's board considers a bonus share issue on 29 March 2023. Nureca and Sun Pharma Advanced Research increased their earnings by 6 per cent.