Indian benchmark indices ended lower for the sixth consecutive session on May 13, as of late selling in power, metal, and financial names undid the day’s gains, pulling the indices lower yet again.
At close, the Sensex was down 136.69 points, or 0.26 percent, at 52,793.62 and the Nifty was down 25.80 points, or 0.16 percent, at 15,782.20.
For the week, the Sensex declined 2,041.96 points, or 3.72 percent, and the Nifty shed 629.05 points, or 3.83 percent.
The market started the day on a higher note on strong Asian cues and remained in the positive territory before witnessing selling in the final hour.
“High domestic inflation data failed to spook investors since the recent selloff has already absorbed the ongoing uncertainties in the market,” said Vinod Nair, Head of Research, Geojit Financial Services.
Domestic markets rebounded as buyers used the recent correction to their advantage following the trend of the global market, he said.
Continuing their selling spree, foreign institutional investors offloaded shares worth Rs 5,255.75 crore on Thursday, according to stock exchange data.
“However, the weakness seen in the banking sector triggered a late selloff. The US Fed cautioned against an aggressive policy stance to bring inflation under the Fed’s comfort zone of 2 percent,” he added.
Hindalco Industries, SBI, JSW Steel, NTPC, and ICICI Bank were among the top Nifty losers. Gainers included Tata Motors, Sun Pharma, M&M, ITC, and HUL.
Titan surged 4.59 percent to Rs 2142.35. Sun Pharma surged 4.12 percent to Rs 885.20. Mahindra & Mahindra jumped 3.43 percent to Rs 894.55. Hindustan Unilever climbed 3.37 percent to Rs 2213.10.
What experts say
Rajesh Malviya
Head- technicals and derivatives, Axis Securities
On the short-term chart, all three indices – Nifty, Midcap, and Smallcap are in the oversold zone. Most of the stocks have witnessed capitulation in the recent past which indicates there might be a chance of pullback from current levels.
However, if the Nifty and the Midcap index break below the March 22 low then they may continue their downward journey and we may witness another 3-4% correction in the coming weeks.
Hemang Jani
Head of the equity strategy- broking and distribution, Motilal Oswal
The market looks oversold, but that does not mean you will see a big bounce because we have seen in the past that at a certain point the market just pauses for a while but cannot sustain the pullback. Large-caps are looking attractive valuation-wise and from a risk-reward point of view.
We see a lot of value in banks, IT, oil & gas, and auto stocks. Nifty earnings growth has been good at 26% and a bounce-back is due but the direction will depend on how long FPIs keep selling.
Nilesh Shah
MD, Kotak Mutual Fund
Investors have to follow their dharma of asset allocation. One can gradually start adding to equity positions. The Street is estimating that EPS (earnings per share) for the Nifty will be ₹850 in FY23 .
At the historic average PE (price to earnings) ratio, the fair value of the market comes to about 15,800. So, we are now at the historical average valuation. That said, this is not the market for leverage or trading without strict stop losses.
