As many as 20 stocks in the Nifty 50 index delivered a positive return for investors in the week ending April 21, 2023. With a gain of 5.2%, Nestle India emerged as the top gainer in the index 
As many as 20 stocks in the Nifty 50 index delivered a positive return for investors in the week ending April 21, 2023. With a gain of 5.2%, Nestle India emerged as the top gainer in the index Snapping a three-week winning streak, Dalal Street ended the past trading week over 1 per cent lower as weak Q4 earnings from the IT space spooked traders’ sentiment. Markets started the week on a pessimistic note as investors remained anxious after the dismal fourth-quarter performance of IT companies that have reported their numbers so far. Both TCS and Infosys reported lower-than-expected Q4 numbers.
Market watcher Vinod Nair, Head of Research at Geojit Financial Services, said: "The sentiments in the domestic market were dampened by the weak start of the earnings season by IT bellwethers and their cautious outlook. The most significant risk for the market today is a downgrade in corporate earnings forecasts. In addition, tepid cues from global peers are causing uncertainties, with investors anticipating a possible 25 bps rate hike by the Fed in its next meeting.”
Nair added: “Additionally, weak signals of a softening job market and declining manufacturing activity in the US have raised fears of a possible recession. Despite the RBI's MPC unanimously deciding to pause rates, the members still hold concerns about high inflation, as revealed in the minutes. Now, the market's focus will shift to the banking sector, with major banks set to release their earnings next week."
These weak signals and the dismal performance of IT companies led the BSE Sensex to decline 776 points, or 1.28 per cent, at 59,655 during the week ended April 21, while the Nifty slipped 204 points, or 1.14 per cent, to 17,624. As many as 20 stocks in the Nifty 50 index delivered a positive return for investors in the week. With a gain of 5.2 per cent, Nestle India emerged as the top gainer in the index. It was followed by Bharat Petroleum Corporation (up 4.3 per cent), ITC (up 3.2 per cent), Asian Paints (up 2.6 per cent), and Coal India (up 2.0 per cent). SBI, Divi's Labs, Britannia and Kotak Mahindra Bank also advanced by over one per cent. On the other hand, Infosys, Tech Mahindra, and Shree Cement declined 11.6 per cent, 8.1 per cent, and 7.5 per cent, respectively.
Dr. Joseph Thomas, Head of Research, Emkay Wealth Management said: “The markets trended lower during the week gone by, as the IT sector witnessed a drag owing to a weak set of numbers being declared by one of the majors. The concerns regarding the global economic outlook too impacted the sentiments; the strong growth reported by China failed to meaningfully influence the bulls. Over the near term, the markets may be expected to be volatile, led by very stock-specific movements as the earnings season goes underway in full swing.”
Sector-wise, the BSE Oil & Gas index surged the most (1.3 per cent) during the week gone by. While BSE Fast Moving Consumer Goods, and BSE Healthcare indices have registered a weekly gain of 1.1 per cent, and 0.2 per cent, respectively. On the other hand, BSE Information Technology has registered a weekly decline of 5.5 per cent.
Technical outlook
Commenting on technical outlook for Nifty, Deepak Jasani, Head of Retail Research at HDFC Securities said: “Nifty ended exactly flat on April 21 after recovering from morning weakness. At close, Nifty was up 0.40 points at 17624.05. Volumes on the NSE were on the lower side. Broad market indices ended in the negative even as the advance-decline ratio ended in the negative at 0.68:1. Nifty fell 1.14 per cent over the week forming a bearish engulfing pattern. 17842-17863 band will now be a crucial resistance for the Nifty. 17428 could be a support in the near term. Q4 results have turned out to be mixed bag and the broad market seems tired due to lack of fund buying in small/midcaps."
Kunal Shah, Senior Technical & Derivatives Analyst at LKP Securities, said: “The BANK NIFTY index witnessed a volatile trading session and it closed around the critical support zone of 42,000. The index is consolidating in a broad range between 42,000-42,500 and a break on either side will have trending moves. The index if it fails to hold the support of 42,000 on a closing basis will witness further downside toward the 41,500 level”.
Copyright©2023 Living Media India Limited. For reprint rights: Syndications Today
