After witnessing good show in the last week of 2022, the market continued the momentum in the first 2 days of 2023. However, in the second half of the week, the equity market witnessed profit booking with BSE Sensex and Nifty50 falling below 60,000 and 18,000 respectively.
For the week, BSE Sensex lost 940.37 points or 1.54 percent to settle at 59,900.37 and Nifty50 fell 245.85 points or 1.35 percent to close at 17,859.45 levels.
Among sectoral indices on the NSE, Nifty IT and Nifty Media declined 2.3 percent each. Nifty Bank lost nearly 2 percent and Realty fell 1.4 percent.
In the given week, BSE Large-Cap, Mid-Cap and Small-cap indices fell 1.3 percent, 0.58 percent and 0.5 percent, respectively.
“The Nifty started the last week on a positive note however witnessed selling pressure in the second half of the week. As a result, the index moved down towards the lows seen in the last couple of weeks,” said Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas.
“It has once again fallen towards the 20-WMA (Weighted Moving Average), daily lower Bollinger Band & the 50 percent retracement of the Sept-Dec 2022 rally.”
Ratnaparkhi believes, structurally, the Nifty has reached lower end of the short term consolidation range, which is 17,800. Unless the index breaks 17,800 on a closing basis it is likely to stay in the short term consolidation mode. On the other hand, the level of 18,000 will act as a resistance for any minor degree bounce, he added.
Also Read: Govt pegs FY23 GDP growth at 7%
Foreign institutional investors (FIIs) remained sellers throughout the first week of 2023 as they sold equities worth Rs 7,813.44 crore, while domestic institutional investors (DIIs) bought equities worth of Rs 2,756.58 crore.
“Domestic equity markets were under pressure this week. Benchmark index like BSE-30 and Nifty-50 witnessed some correction during the week. The BSE Midcap and Small-cap index too were lower, but they outperformed the larger indices. On the sectoral front, most of the indices ended the week with flat to negative returns. BSE IT index declined by ~2% this week, ahead of the start of Q3FY23 results from the coming week. The IT industry is expected to face a tough H1CY23,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
“While the correction in crude oil prices provided some respite; concerns with respect to global slowdown amid tightening of policy rates by Central banks continue to weigh on investor sentiments. In addition to macro factors, the focus of equity markets over the next few weeks will also be towards Q3FY23 corporate earnings,” he added.
The BSE Small-cap index fell 0.5 percent. Vijaya Diagnostic Centre, Lemon Tree Hotels, Indiabulls Housing Finance, Rushil Decor, GRM Overseas, Prataap Snacks, Morepen Laboratories, Dynemic Products, ADF Foods Industries and JMC Projects (India) lost 8-10 percent.
On the other hand, BF Investment, Reliance Communications, TD Power Systems, Sigachi Industries, Indo Amines, TVS Srichakra, Aptech and Nelcast added 15-28 percent.
Also Read – IT Q3FY23 earnings kick off on Jan 9: What to watch out for
Where is Nifty50 headed?
Apurva Sheth, Head of Market Perspectives, Samco Securities
Next week, market participants will keenly watch the inflation numbers of US and China. With the Fed still maintaining its hawkish tone, the US inflation numbers will be highly significant. Back home, the result season of Q3FY23 will kick off with major IT companies reporting their quarterly numbers.
The attrition rates of IT Companies will be closely looked out after they reached the peaks in Q2. Stock specific movements will be prominent and as investors react to earnings misses and beats, they are advised to assess the company’s long-term potential rather than basing their investment decisions solely on quarterly performance.
Amol Athawale, Deputy Vice President – Technical Research at Kotak Securities
The market is now in an oversold territory, there is a strong possibility of a quick pullback rally. For bulls, 18,000 would be the immediate hurdle and below the same the index could slip till 17,750. Further correction may drag down the index to 17,650. On the other side, if the index moves above 18,000 it could move up to 18,100-18,175 levels.
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