Taking Stock | Inflation worries pull market down; auto, banks fall, metals shine

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© Moneycontrol Taking Stock | Inflation worries pull market down; auto, banks fall, metals shine

Selling continued in the Indian market for the third straight session on April 13, as inflation worries weighed heavy on sentiment. At close, the Sensex was down 237.44 points, or 0.41 percent, at 58,338.93 and the Nifty was down 54.60 points, or 0.31 percent, at 17,475.70.

In this holiday-curtailed week, the Sensex and Nifty shed 1.8 percent (1,108.25 points) and 1.7 percent (308.65 points), respectively.

The market will be shut on account of Mahavir Jayanti and Ambedkar Jayanti on April 14 and Good Friday on April 15.

Skyrocketing prices

India’s retail inflation jumped to a 17-month high of 6.95 percent in March from 6.07 percent in February, while industrial growth (IIP) edged up to 1.7 percent in February from 1.5 percent in January, data shared by the government on April 12 shows.

Britain’s annual inflation rate soared to its highest in three decades to 7 percent in March from 6.2 percent in the previous month.

High prices continue to roil the US as well, with inflation soaring over the past year at its fastest pace in more than 40 years. The labor department said that its consumer price index jumped 8.5 percent in March from 12 months earlier, the sharpest year-over-year increase since December 1981.

“Though the global markets have already factored higher levels of inflation owing to high fuel and food prices, the unfavourable numbers dampened investor sentiment,” said Vinod Nair, Head of Research at Geojit Financial Services.

“The ECB policy decision will be closely monitored for direction on how the central bank plans to balance slowing growth and record-high inflation. With the onset of the earnings season, the market is likely to be buoyed by sector-specific momentum.”

Maruti Suzuki, HDFC, HDFC Bank, Tata Motors and Dr Reddy’s Labs were among the top Nifty losers. ONGC, Apollo Hospitals, ITC, Sun Pharma and UPL were the top gainers.

On the sectoral front, Nifty auto and bank lost 0.5 percent each, while buying was seen in FMCG, metal, energy and pharma names.

Also read: Infosys Q4 Earnings Preview | Profit may grow 15-20 percent on year; Revenue likely to increase 24 percent

Stocks and sectors

On the BSE, except realty, auto and bank, all other sectoral indices ended in the green with FMCG, capital goods, metal and oil & gas indices rising 0.5 percent each.

The BSE midcap index fell 0.21 percent, while smallcap index added 0.27 percent.

A long build-up was seen in Indraprastha Gas, ONGC and Ambuja Cements, while a short build-up was seen in the Can Fin Homes, Balrampur Chini and IndiaMart Intermesh.

Thermax, NIIT, GHCL and JSW Steel touched their 52-week high on the BSE.

Among individual stocks, a volume spike of more than 100 percent was seen in Delta Corp and Multi Commodity Exchange of India.

Also Read: Inflation spike drives 10-year bond yields to fresh 3-year peak at 7.2 percent

Outlook for April 18

Rupak De, Senior Technical Analyst, LKP Securities

The Nifty remained volatile with a largely negative bias throughout the session. On the lower end, it challenged the support levels of 17,400-17,450. On the higher end, it failed to sustain above 17,600.

The weakness is expected to continue. Crucial support is seen at 17,400, below which a serious correction in the market may be witnessed. On the higher end, resistance is visible at 17,600 and 17,800.

Amol Athawale, Deputy Vice President-Technical Research, Kotak Securities

The market has consistently witnessed profit-booking at a higher levels, the texture is weak but a pull-back rally is not ruled out if it stays above the 20-day simple moving average (SMA).

Above it, the Nifty and the Sensex can move to 17,700 and 59,000 or 10-day SMA. Further upside may also continue which can lift the Nifty to 17,800-17,850 and the Sensex to 59,300-59,450.

On the flip side, 17,450-17,400 and 58,200-58,000 will be the support zones, below them, the Nifty will retest 17,200-17,100 and the Sensex 57,300-57,000.

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