Domestic indices end their first trading week of CY23 in the red. On Friday, Nifty tumbled 132.70 points or 0.75% at 17,859.45 while Sensex settled at 59,900, down 450 points. The bulls did attempt a recovery in the last hour of trade, with Nifty rising almost 70 points from its intraday lows while Sensex regained about 260 points. As the benchmark indices fell, banking sector index Bank Nifty followed suit, down 419 points or 1% at 42,188. The broader markets closed in the red as well, with Nifty Midcap 100 and Nifty Smallcap 100 closing 0.76% and 0.81% lower respectively. Sectorally, all indices were losers, however Nifty IT ended down 2%, Nifty Private Bank closed 1.12% lower and Nifty Media shed 1.45%. JSW Steel, TCS, IndusInd Bank were the top laggards on the Nifty 50 index.

Markets Decoded: Investors await Q3FY23 earnings

“Investor risk sentiment took a blow post the release of the FOMC meeting minutes, which indicated further rate hikes in 2023 to tame inflation. Upcoming key US jobs data is expected to be encouraging which would influence the next Fed’s policy. The market already remains sensitive to FIIs selling and IT stocks traded with deep cuts ahead the release of corporate earnings next week as the growth is anticipated to be muted.

“Volumes on the NSE again fell suggesting indecision on the part of traders to trade. Broad market indices continued to bleed as the advance decline ratio remained low at 0.51:1. Asian shares were mixed Friday after Wall Street benchmarks fell on worries that the U.S. Federal Reserve will keep raising interest rates. European stocks struggled to maintain gains on Friday as traders braced for US jobs data due later that will help chart the path forward for Federal Reserve monetary tightening.

“Domestic equity markets were under pressure this week. 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. 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.

Nifty Technical View: Support seen at 17770

“Bears continue to have the upper hand as the benchmark index Nifty has been posting red candles for the last three days. The Nifty found support around the previous swing low on the daily timeframe. The momentum indicator RSI (14) is in bearish crossover, suggesting weak price momentum for the near term. Going forward, 17,770 is likely to act as support for the falling Nifty; a decisive fall below the said level may take the index towards 17,500. On the higher end, resistance is visible at 18,000, above which a recovery may come.” –

“Nifty almost tested the recent lows of 17779 and bounced up a little. On a weekly basis, Nifty lost 1.36?lling in 4 out of 5 weeks and gave up almost the entire gains of the previous week. Nifty on breaching the recent lows of 17779 could head towards 17429 while 18105 could act as a resistance in the near term.