Daily Markets Wrap - Dec 17, 2021 - Mr. Deepak Jasani, Head of Retail Research, HDFC Securities

Nifty continued its down move on Dec 17 post a minor bounce on the previous day, on renewed fears about Omicron variant and the negative hints from hawkish view taken by most Central Banks this week. Nifty opened flat and began falling from the beginning to make a first bottom at 1205 Hrs. A recovery attempt post that took the Nifty up 115 points from the lows. Another sell-off post 1400 Hrs, took the Nifty down again. At close the Nifty was down 1.47% or 252.7 points at 16995.7.

On a day when the volumes on the NSE were higher than recent average, all sectoral indices except IT ended in the negative. BSE Midcap and Smallcap indices underperformed the Nifty falling 2.07-2.42%.

Asian stocks tested 13-month lows on Friday, as fears about the Omicron variant of the coronavirus, inflation concerns and hawkish pivots by the world's major central banks knocked investor confidence. European stock markets headed lower on Friday as traders continue to digest the surprise interest rate decision from the Bank of England (BoE) and new restrictions due to the Omicron variant.

Bank of Japan on Friday dialled back some emergency pandemic-funding on Friday (reducing purchases of corporate bonds to pre-crisis levels after March) but maintained its ultra-loose policy and extended financial relief for small firms, cementing expectations it will remain among the most dovish central banks for the foreseeable future.

From the top of 18604, each of the Nifty's fall has been sharper than the preceding rises with two weeks of rise getting nullified in just one week. This clearly shows the sell-on-rise behavior of institutional investors and smart traders. Advance decline ratio dipped sharply to 435:1605 on the NSE on Friday. Now Nifty is close to the previous supports of 16722-16891. On bounces 17192 could be a resistance. On weekly basis, Nifty fell 3%, formed a bearish Engulfing pattern and closed near the week's low. In the process the Nifty logged its second worst week in 10 months.

Source : Equity Bulls

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