IT bluechips drag Sensex over 400 points lower, Nifty below 21,950

Despite losses, the Nifty breadth remained positive with 31 stocks trading in the green while remaining 19 in the red. The top five losers were all IT counters viz. , , (TCS), and while the top gainers were , , , and .

Out of 15 Nifty sectoral indices seven were trading in the red. Apart from IT, the other top loser was Nifty Metal. Banking gauge Nifty Bank was trading with minor uptick at 46,699.10, up by 14.20 points or 0.03%. Pharma stocks were the major gainers followed by FMCG.

Selling pressure was visible in broader markets as well with the Nifty Midcap 100 hovering around 46,933, down by 0.21% while the Nifty Smallcap trading at 14,925.05, 0.24% lower.

Expert Take
"The favorable global developments have provided some respite to the recent beating, and thus, it is advisable to keep a close watch to project the near-term trend of our markets. In the meantime, it is important to stay fussy in stock selection and refrain from aggressive bets until we get clarity over the market trend," Sameet Chavan, Head Research, Technical and Derivative at Angel One said.

The benchmark is once again placed between the 20 and 50 DEMA with a small-bodied candlestick formation, showcasing lack of convictions in the counter parties, Chavan said, adding that mid and small-cap indices aren still not out of the woods and investors need to maintain caution.

"For now, 21,870-21,800 is likely to be seen as intermediate support, followed by the recent swing low of 21,700 from a short-term point of view. While on the higher end, the 20 DEMA around 22,100, followed by 22,150-22,200 remains a daunting task for the bulls and until a decisive attainment, tentativeness is likely to persist," the Angel One analyst said.

Global Markets
Handover from the US markets was positive with major headline indices on the Wall Street ending higher on Thursday. While Dow 30 ended at 39,781.40, up by 269.24 or 0.68%, S&P 500 settled at 5,241.53, higher by 16.91 points or 0.32%. Meanwhile, Nasdaq Composite gained by over 32.43 points or 0.20% to end at 16,401.80 on Thursday.

Most major Asian indices traded negative with Japanese Nikkei 225 trading with declines of 0.09% or 38 points around 9:40 am India time while Hong Kong's Hang Seng was down by nearly 3%. Singapore's FTSE Straits Times Index was lower by nearly 0.31% and China's Shanghai Composite fell by 1.41%.

Currency Watch
Indian rupee opened 12 paise lower at 83.27 versus the US dollar as against Thursday’s close of 83.14. Meanwhile, China's yuan declined to a four-month low against the dollar on Friday, breaching a key threshold and prompting state-owned banks to step in to defend the currency.

The correction in Asian currencies was on account of stronger greenback. On Friday, it shot up to 104.19, gaining 0.76 or 0.74%.

"RBI has accumulated good enough reserves in these last few days to protect any big downside move in rupee and is expected to be present at earlier level of 83.40. Flows will continue, but with change in sentiment $ rupee could become a buy on dips from sell on upticks," Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP said. His advice to exporters is to continue selling the upticks while importers to sit tight and wait for better levels to hedge their imports.

Oil prices
Crude oil prices were trading lower on Friday with US WTI oil contracts trading at $80.460, down by $0.610 or 0.750% while Brent oil futures were hovering near $85.160, down by $0.620 or 0.720%.

On the MCX, the April Crude Oil futures were trading at Rs 6,714 per BBL, down by Rs 19 or 0.28%.

Oil is currently trading at multiple month highs buoyed by strong global demand and geopolitical tensions. The price firmed-up this week after Russian energy installations were attacked by Ukraine.

FII/DII Tracker
Indian markets rose on Thursday on the back of buying by domestic investors. While foreign institutional investors (FIIs) were net sellers and offloaded Indian equities worth Rs 1,826.97, the domestic institutional investors (DIIs) were net buyers at Rs 3,208.87 crore.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)