Sensex, and Nifty fall amid weakness in IT stocks; volatility likely to stay, Analysts expect volatility to persist in the near term. The Nifty has to decisive close above 22,300 to move higher, they say

Benchmark indices the Sensex and the Nifty traded down on March 22 morning, pulled down by IT stocks after tech giant Accenture cut its revenue guidance over an uncertain economic environment.

The Sensex and the Nifty declined 0.3 percent each to 72,379 and 21,943 on March 22 morning. The market breadth was still in favor of gainers as around 1,699 shares advanced, 827 declined and 111 were unchanged.

Mid and smallcap indices rose marginally in opening deals but analysts said the worst is not over yet. Volatility is likely to persist in the near term and a decisive close above 22,300 can help the Nifty move higher.

Vaishali Parekh, vice president of technical research at Prabhudas Lilladher, said that the Nifty needs to move past the 22,300 zone to strengthen positive bias and retest the previous peak of 22,525.

Deven Mehata, Research Analyst at Choice Broking, said the Nifty faces resistance at 22,100, followed by 22,150 and 22,200. "The support for the day is at 21,950 followed by 21,900 and 21,800," he added.

Sectorally, Nifty IT was the worst hit as it slipped over 3 percent, with TCS, Tech Mahindra, and Infosys leading the losses. Accenture's revised outlook anticipates full-year revenue growth to be within the range of 1 percent to 3 percent, compared to its earlier projection of 2 percent to 5 percent.

Accenture's performance is widely regarded as a benchmark for the Indian IT industry, providing a glimpse into the expected outcomes for Indian IT companies. The fourth quarter earnings season commences on April 12, with bellwether TCS reporting its earnings.

On the flipside, the Nifty Realty index was the top sectoral performer as it gained over a percent led by Prestige Estates, Brigade Enterprises, and Sobha.

Given the truncated next week with only three trading days, volumes have dipped significantly in recent days, said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. This, he expects to continue in the next few days as well. "Any big intraday dips are likely to be bought since DIIs are sitting on big cash and there is value in pockets of large-caps like banking," he suggested.

Globally, all major averages in the US markets closed at record levels overnight. Dow Jones, tech-heavy NASDAQ Composite, and the S&P 500 indices gained up to 0.7 percent after investors were reassured of 3 interest rate cuts this year from the Fed's 'dot plot.'

Elsewhere, Japan's Nikkei 225 crossed the 41,000 mark to hit an all-time high after inflation rose to 2.8 percent in February, much above market expectations of 2.2 percent. However, Hong Kong's Hang Seng plunged by 3 percent and Australia's S&P 200 fell 0.3 percent this morning.