Indian equity benchmarks on Friday extended their fall for the second straight session. The domestic indices were dragged by pharma, healthcare, bank, financial, consumer goods, metal and automobile stocks. The 30-share BSE Sensex pack fell 366 points or 0.56 per cent to close at 65,323; while the broader NSE Nifty index moved 115 points or 0.59 per cent lower to settle at 19,428. Mid and smallcap shares finished on a weak note, with the Nifty Midcap 100 down 0.45 per cent and Nifty Smallcap 100 falling 0.18 per cent. Fear gauge India VIX rose 1.07 per cent to 11.52. Most Asian stocks settled lower today.
Back home, Reserve Bank of India (RBI)'s decision to raise the retail inflation forecast and liquidity absorption measures kept investors cautious. RBI now sees inflation at 6.20 per cent during the ongoing July-September quarter (Q2 FY24), significantly higher than the earlier forecast of 5.20 per cent. The central bank also asked lenders to set aside a larger part of incremental deposits under the cash reserve ratio (CRR), to mop-up excess liquidity. Although, it held repo rate steady at 6.50 per cent.
"The domestic market continued to experience selling pressure, with banking stocks extending their decline in reaction to the RBI's liquidity absorption measures. The escalating concerns about inflation further weighed down domestic market sentiments. Despite the US consumer price inflation coming in lower than expected and the UK GDP beating estimates, global sentiment remained unfavourable," said Vinod Nair, Head of Research at Geojit Financial Services.
13 out of the 15 sectoral indices on NSE settled in the red. Sub-indices Nifty Pharma, Nifty Healthcare, Nifty Bank, Nifty Financial Services, Nifty FMCG, Nifty Metal and Nifty Auto underperformed the Nifty index by falling 1.45 per cent, 1.39 per cent, 0.77 per cent, 0.87 per cent, 0.73 per cent, 0.51 per cent and 0.43 per cent, respectively.
Shares of Hindware Home Innovation cracked 13.06 per cent. Sequent Scientific, Apollo Tyres, Alkem Labs, Cressanda Solutions, Ashoka Buildcon and Dhani Services slumped up to 9.30 per cent. Index heavyweights HDFC Bank, Infosys and Bajaj Finance declined up to 1.50 per cent.
On the flipside, Indian Overseas Bank zoomed 13.14 per cent, while Kalyan Jewellers gained 11.52 per cent. PTC Industries, GMM, Pfaudler, Kirlosker Oil Engines, Rhi Magnesita India, Hindustan Copper jumped up to 10 per cent.
Out of a total of 3,724 stocks that traded during the day, 1,524 settled with cuts while 2,049 others ended higher. The rest 151 stocks stayed unchanged.
Nifty Bank outlook
"Aside from the first hour, Nifty remained predominantly rangebound, with the benchmark index slipping below 19,500. However, it did not experience a significant correction as traders chose to stay on the sidelines due to the upcoming holidays. From a technical standpoint, Nifty continues to exhibit a bearish trend as it remains below the 21-day Exponential Moving Average (21EMA). The Relative Strength Index (RSI) is also indicating a bearish crossover. In the short term, there's a possibility that the index might decline towards the 19,300 level. On the upside, there's a resistance level situated at 19,500," said Rupak De, Senior Technical analyst at LKP Securities.
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