The Indian stock market witnessed a dull trading session, with Nifty closing marginally lower near the 17,600 levels. The Sensex fell 159 points due to the prevailing underperformance of select sectors such as IT and energy, which weighed on sentiment. The broader indices, BSE midcap and smallcap, ended almost unchanged, with midcap losing 0.2 percent, while smallcap ended flat.
IT stocks continued to weigh heavy on the market, as HCL Technologies, Infosys, IndusInd Bank, SBI Life Insurance, and Wipro were among the top losers on the Nifty. However, BPCL, Divis Laboratories, Bajaj Auto, Axis Bank, and M&M were among the gainers.
According to Ajit Mishra, VP - Technical Research, Religare Broking, the market is seeing a healthy consolidation in the index and expects it to end soon. Participants should continue with a stock-specific approach and prefer sectors like banking, financials, auto, and FMCG for long trades.
The Nifty has been falling for the past three days due to deteriorating risk sentiment globally and growing investor anxiety about a probable recession. Infosys and TCS's dismal Q4 reports have also influenced the downward trend. The Pharma, Metal, and Realty Indices saw some buying despite the general decrease, with the Nifty Metal Index outperforming and the Nifty IT Index underperforming.
Vinod Nair, Head of Research at Geojit Financial Services, said that the dark clouds of weak Q4 numbers are haunting the domestic market, leading to a consecutive third fall in the week. IT stocks continued their selling spree ahead of the release of earnings from other tech majors. Tepid cues from global peers are also creating havoc as the market prices in the possibility of another rate hike by the Fed. The biggest risk for the market today is a downgrade in the corporate earnings forecast.
Overall, the market is expected to remain choppy & volatile, with support at 17,573 and resistance at 17,863 for the Nifty. The 21 DMA, 50 DMA, and 200 DMA are being attentively examined by professional analysts for any indications of trends, which are now neutral. The overall range for the Nifty is expected to be between 17,500-17,750. The market is also likely to continue with momentum in pharma, specialty chemicals, sugar, rice, and realty sectors over the next few days.