POST-MARKET SUMMARY 17 January 2024

On January 17, the equity benchmarks experienced their biggest single-day decline in 19 months due to HDFC Bank's disappointing Q3 performance, which triggered a slump in the banking sector and unsettled the market. This downturn was exacerbated by weak global cues. Comments from US Federal Reserve Governor Christopher Waller further contributed to the market turmoil by dampening expectations of a March rate cut, causing 10-year treasury yields and the dollar index to rise and sending ripples across various sectors. Except for IT, all indices concluded the day in the red, with auto, metal, oil & gas, and realty sectors witnessing a decline of 1-2%. Both BSE midcap and smallcap indices fell 1%. 

NIFTY:  The index opened 385 points lower at 21,647 and made a high of 21,851 before closing at 21,571. Nifty has formed a bearish candlestick with long upper shadow on the daily chart. Its immediate resistance level is now placed at 21,680 while immediate support is at 21,550. 

BANK NIFTY: The index opened 1,552 points lower at 46,573 and closed at 46,064. Bank Nifty has formed a bearish candlestick pattern with long upper shadow on the daily chart. Its immediate resistance level is now placed at 46,400 while support is at 45,900.

Stocks in Spotlight

▪  HDFC Bank: Stock plunged over 8% after its Q3 results disappointed investors. Although net profit grew 33% and met expectations, it was powered by a one-off tax gain.

▪  ICICI Lombard: Stock gained 5% after the company’s Q3 results beat market expectations. The company reported a net premium income of Rs 4,690 crore vs estimates of Rs 4,376 crore.

▪  IREDA: Stock gained 5% after the company announced partnership with Indian Overseas Bank (IOB) to co-finance renewable energy projects in India.

Global News 

▪  Gold prices were flat on Wednesday after hitting an almost one-week low, pressured by a stronger dollar as hawkish comments from a Federal Reserve official diminished hopes of a U.S. interest rate cut in March.

▪  European markets were in negative territory for a third straight session, while regional focus remains on the World Economic Forum in Davos, Switzerland.

▪  Oil fell more than $1 on Wednesday as economic growth in China, the world’s second-largest crude user, slightly missed expectations, raising concerns about future demand, while U.S. dollar strength dented investor’s risk appetite.

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