A sharp drop followed a brief uptick

Nifty Trader • June 16, 2022

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Index	Price	Change	% Chg
NIFTY 50	15360.60	–331.55	–2.11%
NIFTY BANK	32617.10	-721.90	–2.17%
BSE SENSEX	51495.79	–1045.60	–1.99%

Daily closing price, change and % change of benchmark indices.

A brief uptick followed by a sharp drop.

Following the US Fed announcement, the market briefly rose, reaching an intraday high of 15863 before falling by 332 points to close at 15361. A sharp drop followed a brief uptick.

The US Fed raised interest rates by 75 basis points, as expected. In addition, the US Fed forecasts a slowing economy and rising unemployment in the coming months.

So, why did the market fall when everyone expected the US Fed would raise interest rates by 75 basis points?

The market is nervous and falling because of rate hikes and tightening at a faster pace.

For the fifth day in a row, equity benchmark indices were down. Nifty recorded an intraday high of 15863 and a low of 15335.

Furthermore, the Nifty is trading below its 20-day, 50-day, and 200-day simple moving averages. Similarly, the Nifty Bank fell 722 points or 2.17 percent.

Daily nifty data with brief rally and sharp drop. — Nifty – Gap down and a large bearish candle shows nervousness.

The advance-decline ratio was 0.16, and the market breadth was negative. The volatility index, on the other hand, increased by 3.25 percent to 22.87.

FIIs were net sellers today also, as has been the case for several months.

NIFTY – DAILY MARKET ACTION
Advancers – 292
Decliners – 1874
52Wk High – 14
52Wk Low – 267
High Band Hitters – 53
Low Band Hitters – 140
200d SMA – 17247
50d SMA – 16625
20d SMA – 16236

Top Gainers and Losers

The top gainers on the Nifty 50 were Nestle (+0.5%) and Britannia (+0.17%).

Meanwhile, the top losers in the Nifty 50 were Hindalco (-6.74 percent), Tata Steel (-6.35 percent), ONGC (-5.42 percent), Coal India (-5.39 percent), and Tata Motors (-5.1 percent).

Sectors & Broader Indices – Sharp drop

All sectoral indices ended the day in the red. The Nifty Metal fell 5.24 percent, followed by media and realty, which fell 3.2 and 2.8 percent, respectively.

Likewise, the broader indices were under pressure. The Nifty Midcap 50 dropped 2.45 percent, while the Nifty Smallcap 50 dropped 3.49 percent.

NIFTY SECTORS – NOTABLE ACTION
METAL -5.24%
MEDIA -3.20%
REALTY -2.80%

Looking Ahead – Inflation and Sharp drop

The bulls are on the defensive because of the risks of missing the fiscal deficit target, high inflation, and possible downward revision to the GDP growth estimate.

Daily Pivots

S2	S1	R1	R2
14992	15176	15704	16048

Daily Nifty Pivots

Today, Nifty broke both the support levels of yesterday’s pivots. The Nifty trading range for tomorrow is 15180 to 15700, with a negative bias.

Though the market briefly rose in the morning trading session, bulls could not provide the necessary follow-through, allowing the market to fall.

For the time being, the major economic news is over, and no market-moving events are on the horizon. The market may grind low for a few trading sessions.

Read previous -Daily Insights- here
Waiting for the US Fed meeting outcome
Nifty slides while waiting for US Fed news
Inflation spook Bulls

This article is only for educational purposes and is not an investment advice.