What next for markets after the Monday mayhem?

The week began on a dismal note at the markets, as earnings disappointment by index heavyweights Infosys and HDFC Bank triggered a sell-off in IT and financial stocks. A spike in WPI-based inflation to 14.55% in March also weighed on the investor sentiment.

At close, the BSE Sensex and the NSE Nifty 50 declined 2.0 per cent and 1.7 per cent, respectively. The Nifty IT tumbled 4.6 per cent, and the Bank Nifty shed 2 per cent.

The HDFC duo – that is, HDFC and HDFC Bank – along with Infosys accounted for more than 70 per cent of the day’s losses on the S&P BSE Sensex.

Infosys registered its biggest intra-day fall in two years as it tumbled over 9 per cent. The stock eventually ended 7.3 per cent lower at Rs 1,621. Other major losers were....

HDFC, HDFC Bank, Tech Mahindra and TCS – down in the range of 3.7 to 4.8 per cent on Monday.

According to Naveen Kulkarni of Axis Securities, the markets will continue to witness volatility in FY23, especially in the first half of the year with rising interest rates globally and high inflation, expected to persist. In this scenario, he expects money to move from long-duration debt funds to equity funds in the second half of the year.

Kulkarni is positive on metals, hospitals, hospitality, oil refining and capital goods sectors, but believes discretionary consumption, IT, NBFCs may underperform.

Given the fall in indices, wherein the NSE Nifty has shed nearly 6 per cent in just eight trading sessions from its recent high of 18,115. The next major question on investors mind is that will the indices decline further or shall we see a reversal?
 
That apart on Tuesday, shares of ACC, L&T Infotech, Mastek and Tata Steel Long Products are likely to be in focus as the companies are scheduled to announce Q4 earnings.
 

Watch video