In an extremely volatile session on Dalal Street, the benchmark indices managed to close on a positive note on January 30, snapping a two-day losing streak.
At close, the Sensex was up 169.51 points or 0.29% at 59,500.41, and the Nifty was up 44.70 points or 0.25% at 17,649.
After a gap-down start, the market recovered smartly in the early hours but gyrated between gains and losses as the session progressed. The market participants remained cautious ahead of the Budget 2022-23 and interest- rate decisions by major central banks. The Sensex and Nifty sank to the day’s low of 58,699.20 and 17,405.55 but recovered smartly.
“The response by Adani had a mixed effect on the stock group and market. The saga is likely to continue as a hanging risk in the minds of investors in the medium term. To expect a scientific assessment report either by a strong independent third party or government is dim in the short term. Now the focus of the market will be on the budget and the Fed policy,” said Vinod Nair, Head of Research at Geojit Financial Services.
Adani stocks continue to be in focus
The Adani group stocks traded mixed on January 30. Flagship Adani Enterprises ended 4 percent higher, while Adani Ports and Special Economic Zone ended marginally lower.
Adani Green Energy, Adani Wilmar, Adani Transmission, Adani Power and Adani Total Gas fell 5-20 percent.
The Adani group stocks were hammered in the week gone by after American short-seller Hindenburg Research which flagged high debt and alleged use of tax havens. Denying the charges, the company issued a 431-page rebuttal to the report.
Stocks and sectors
Adani Enterprises, Bajaj Finance, UltraTech Cement, Bajaj Finserv and HCL Technologies were among the biggest gainers on the Nifty, while losers included Power Grid Corporation, JSW Steel, Bajaj Auto, Larsen and Toubro and IndusInd Bank.
On the sectoral front, the Nifty Energy index shed 3 percent. The information technology index rose a percent and the PSU Bank index was up 0.5 percent.
Also Read: LIC clarifies on Adani shares: Equity exposure at Rs 56,142 crore
The BSE midcap and the smallcap indices ended marginally lower.
On the BSE, power and oil & gas indices lost further ground and shed 5.3 percent and 4 percent, while capital goods and metal indices fell a percent each. The information technology index rose 1 percent.
More than 150 stocks touched their 52-week lows on the BSE. These include Bal Pharma, Adani Green Energy, Adani Transmission, Gland Pharma, Omaxe, Indigo Paints, SpiceJet, Zydus Wellness, Vikas WSP and Sintex Industries.
Among individual stocks, a volume spike of more than 100 percent was seen in Laurus Lab, SRF and Gail India.
A short build-up was seen in Dixon Technologies, Adani Ports and Ambuja Cements. A long build-up was seen in Persistent Systems, Coforge and Hindustan Copper.
Also Read – L&T Q3 result: Net profit rises 24% to Rs 2,553 crore; beats expectation
Outlook for January 31
Ajit Mishra, VP-Technical Research, Religare Broking
The market ended marginally higher amid volatility but only a handful of index majors contributed to the rebound while the broader indices continue to reel under pressure.
The market has been trying to hold the support zone of the long-term moving average (200 EMA), however, we expect the negative tone to continue until the Nifty reclaims 18,000 decisively or forms a reversal pattern. Volatility will continue to keep traders on the edge ahead of the Budget and other events. In such a scenario, it is prudent to restrict positions and adopt a hedged approach.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Volatility was the order of the day, as benchmark Sensex gyrated nearly 1,000 points intra-day before staging a smart comeback in late trade on selective buying. Two big events, the Union Budget and the US Federal Reserve interest rate decision are making investors nervous.
Technically, the Nifty found support near 17,400 and bounced back sharply. However, the short-term is still on the down side. A pullback rally is possible if the index trades above 17,550. Above it, the market can move to 17,750-17,800. If the index slips below 17,550, the market can fall to 17,400 -17,350.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
Carrying forwards the bearish momentum of the last week, the Nifty opened gap down to breach the last week’s low of 17,493. On the downside it received support near 17,400 and recovered sharply towards the end of the session.
It managed to hold above the 61.8 percent retracement of the September – December 2022 rise and 200 DEMA, which are near 17,550. This makes the day’s low of 17,405 a crucial support.
On the higher side, the index can test 17,800, which will now act as resistance as per the principle of role reversal.
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