Sell-on-rise gang returns after 3 days of rally on Dalal Street

NEW DELHI: Benchmark indices on Friday opened higher for the fourth day in a row but soon slipped into the red as selling in bank stocks and index heavyweight Reliance Industries overshadowed buying in IT companies.

Investors were cautious of rising cases of Omicron variant, while they were looking for incoming economic readings globally for direction. A recovery in the rupee and diminishing foreign outflows helped but a rebound in oil prices weighed on the sentiment.

At 10.10 am, NSE Nifty50 was quoting at 16,931, down 142 points or 0.83 per cent. While the BSE Sensex was trading at 439 points or 0.77 per cent lower at 56,875.


"Last three days of recovery had been remarkable, considering the nervousness we have had early this week," said Sameet Chavan of Angel One.

"If the bulls have to regain their strength, 17,200-17,300 needs to be surpassed with some authority. This development will confirm the completion of the recent corrective phase and the bulls would probably be back at a driver’s seat thereafter," Chavan said.

Among Sensex stocks, HCL Tech gained 3.25 per cent to Rs 1,267. TCS, Asian Paints, Wipro and Dr Reddy's Labs rose over 0.5 per cent each. Tech Mahindra, Maruti Suzuki, Infosys and Hindustan Unilever also gained but marginally.

IndusInd Bank, Sun Pharma, NTPC, Axis Bank and Power Grid declined up to 0.7 per cent.

Market Outlook
History suggests the market has delivered positive returns in the last 15 days of the year in nine of the past 10 calendars.

ICICIdirect in a recent note said that a new trend is in the making where levels near 15,700 should act as a support while it expects Nifty50 to move towards 20,800 in coming months.

In its outlook note on domestic equities for the first half of 2022, Credit Suisse said 30 per cent of Nifty50 constituents still offer valuation expansion potential and expects 38 out of 50 Nifty50 companies, carrying 76 per cent of Nifty50 weightage, to see return on equity (ROE) expansion in the next two years compared with the pre-Covid three-year average.

Another global brokerage BofA Securities said it sees India chasing normalcy with respect to growth in FY23, but inflationary pressures are set to rise.

"Monetary policy is at an inflection point, we see RBI MPC normalise policy corridor in FY22 & hike repo rate by 100 bps in FY23. We see fiscal deficit consolidating further in FY23 and external position is expected to stay resilient despite rising current account deficit (CAD)," the brokerage added.