Market Play: Stock Market Tumbles Amid Mixed Sentiment
Stock Market Drops: Sensex Declines 231 Points and Nifty Slides 49 Points Due to Mixed International Market Signals
The Capital: New Delhi
Friday's market action saw the Indian indices taking a tumble, with uncertainty looming over tech, finance, and pharma sectors in the early trade.
By 9:29 am, Sensex was bearing a weight of 231.64 points, or 0.28%, pulling back at 82,299.10, while the mighty Nifty sloped down 49.95 points, or 0.20%, to settle at 25,012.15.
Banking heavyweight, Nifty Bank, felt a sting of 52.40 points, or 0.09%, dipping down to 55,303.20. The Nifty Midcap 100 index stood at 56,700.05 after a 169.20 point surge, or 0.30%. The vivacious Nifty Smallcap 100 index saw a spark of 78.45 points, or 0.46%, settling at 17,318.40.
Analysing the technical landscape, Nifty gaped open a robust bullish candle, defying an inside bar pattern, and breaching the crucial 25,000 threshold[1]. According to accounts by Hardik Matalia from Choice Broking, the index had skirmished repeatedly for a 200-point recovery, mirror-ing sustained bullish momentum. The support levels are scoped at 24,850-24,700, while resistance emerges at 25,100 and 25,235. In case of a decisive break beyond the 25,235 barricade, the index could surge all the way to the 25,500-25,743 realm.
Traders are encouraged to adopt a "buy on dips" maneuver, while exercising diligent risk management tactics and abstaining from taking large overnight positions in light of ongoing unpredictability[2].
In the Sensex brigade, heavyweights like Bharti Airtel, IndusInd Bank, SBI, Infosys, HCL Tech, and M&M experienced losses, while UltraTech Cement, Bajaj Finserv, NTPC, Maruti Suzuki, and Axis Bank impressed with gains.
Meanwhile, in the Asian markets, winners lay claim in priority to Bangkok, Jakarta, and Seoul, while China, Hong Kong, and Japan fell somber. In the previous trading session, the Dow Jones resounded with a thunderous 271.69 point gain, or 0.65%, to close at an impressive 42,322.75[4]. The S&P 500 reported modest wins of 24.35 points, or 0.41%, finishing at 5,916.93, and the Nasdaq chimed with a minor loss of 34.49 points, or 0.18%, to close at 19,112.32[4].
The April economic data spawned an intriguing cocktail of indicators regarding the US economy. The Producer Price Index (PPI) presented a bewildering snap of a 0.5% descent, confounding economists' predictions of a mere 0.2% rise. This puzzling retreat in producer prices could signal softening inflationary pressures at the wholesale tier, noted experts[3].
Devarsh Vakil, Head of Prime Research at HDFC Securities, shared that Jerome Powell, Federal Reserve Chairman, had discussed the review of the Fed's framework on Thursday. According to Powell, the Fed planned to make tweaks to its monetary policy strategy in response to profound changes in inflation and interest rate forecasts resulting from the 2020 pandemic[3].
On the institutional front, foreign institutional investors (FIIs) endowed equities to the tune of Rs 5,392.94 crore on May 15, whereas domestic institutional investors (DIIs) shed equities valued at Rs 1,668.47 crore[4].
(Except for the headline, this story has not been edited by Daily Hunt staff and is published from a syndicated feed.)
Relevant Enrichment Points
- The market has faced mixed trading conditions recently, with pockets of growth in certain sectors, but overall stagnation or decline in other areas.
- The auto sector and midcap and smallcap indices have been among the strongest performers, while tech and finance sectors have experienced weakness.
- The Nifty managed to break above the 25,000 level, but the recovery was not sustained, leading to a pullback.
- Foreign institutional investors (FIIs) have been net buyers of equities, while domestic institutional investors (DIIs) have been net sellers in recent days.
- The unexpected drop in the US Producer Price Index (PPI) might indicate a decrease in inflationary pressures at the wholesale level, which could impact the global economy, including the Indian stock market.
- Amidst the current market volatility, it's crucial for investors to be careful with their investing strategies, considering interest rates, inflation, and the uncertain relationship between the finance sector and the stock market.
- While some sectors like the auto sector and midcap and smallcap indices have shown growth, the tech and finance sectors have faced challenges, demonstrating the mixed performance of various sectors within the Indian economy.
