Sensex, Nifty snap two-week gains
Corrections were seen in stocks that were highly overvalued without any fundamentals justifying the high valuations.
Benchmark indices ended lower during the week, snapping the prior two-week rising trend. Rising global crude oil prices, profit booking and negative global cues put pressure on the bourses. Sensex settled above 60,800 while Nifty closed above 18,100 level. In the week ended October 22, Sensex declined 484.33 points or 0.79% to settle at 60,821.62. The Nifty 50 index shed 223.65 points or 1.22% to settle at 18,114.90. The BSE Mid-Cap index lost 1,133.05 or 4.24 percent to settle at 25,566.64. The BSE Small-Cap index skid 1,556.75 points or 5.21 percent to settle at 28,336.31.
“Despite a positive opening this week, domestic indices slipped into bear’s grip for four consecutive trading sessions led by profit booking in most sectors. The ongoing market rectification is not an over-reaction and can sustain in the near term due to high valuations. High volatility in the domestic market forced foreign and domestic institutional investors to remain net sellers. Corrections were seen in stocks which were highly overvalued without any fundamentals justifying the high valuations,” said Vinod Nair, Head of Research at Geojit Financial Services.
Indian markets were impacted due to muted Q2 results which were weaker than forecasted due to high input cost. However, on a positive note, the long-term market trend is intact due to further re-opening of the economy, low interest cycle and fiscal & private spending. In the week ahead, domestic markets will continue to track Q2 results for further direction. Any further inconsistency, as seen in recent numbers, can lead to further fall in the short-term, Nair added.
Week that was
The equity benchmarks rose for the seventh consecutive session and settled at record closing levels on Monday, 18 October 2021. The S&P BSE Sensex jumped 459.64 points or 0.75% to 61,765.59. The Nifty 50 index gained 138.50 points or 0.76% at 18,477.05.
The equity barometers corrected on Tuesday, 19 October 2021 snapping a rally in the past seven sessions. The Sensex fell 49.54 points, or 0.08% at 61,716.05. It hit a record high of 62,245.43 in intraday trade. After hitting an all-time high of 18,604.45 in intraday trade, the Nifty 50 index reversed trend and fell 58.30 points, or 0.32% to end at 18,418.75.
The domestic equity benchmarks ended with significant cuts on Wednesday, 20 October 2021. The S&P BSE Sensex, dropped 456.09 points or 0.74% to 61,259.96. The Nifty 50 index lost 152.15 points or 0.83% to 18,266.60.
The market declined for the third consecutive session on Thursday, 21 October 2021. Profit selling, weak Q2 results and negative global cues put pressure on bourses. Traders are concerned about the adverse impact of inflation and higher commodity prices on corporate revenues and margins. The barometer index, the S&P BSE Sensex, dropped 336.46 points or 0.55% to 60,923.50. The Nifty 50 index lost 88.50 points or 0.48% to 18,178.10.
The domestic equity benchmarks ended with minor cuts after a volatile session on Friday, 22 October 2021. The Nifty closed below the 18,150 mark. The barometer index, the S&P BSE Sensex, dropped 101.88 points or 0.17% to 60,821.62. The Nifty 50 index lost 63.20 points or 0.35% to 18,114.90.