D-Street plays safe ahead of results, macro data
stock benchmarks dropped close to 1% on Monday as investors cut their bets ahead of the start of the third-quarter corporate results season this week.
The market was also cautious in the run-up to the December US consumer inflation data scheduled on January 11, after the country's jobs data for the month turned out to be stronger than expected. These economic readings could be some of the key factors determining the US Federal Reserve's upcoming monetary policy actions.
BSE's Sensex dropped 670.93 points or 0.93% to close at 71,355.22.
NSE's Nifty declined 197.80 points or 0.91% to close at 21,513.
Analysts said the Nifty could decline further if the index closes below 21,500, a key support level. «As of now, the index is on the verge of a breakdown on the lower time frame charts,» said Mehul Kothari, DVP-technical research at Anand Rathi Shares & Stock Brokers.
«The breakdown will get confirmed on a close below 21,500.»
NSE's volatility index, or VIX, surged 6.57% to 13.46, suggesting traders are seeing risks in the market in the near term. Kothari said the Nifty might be dragged down to 21,000 levels in case of further correction.
On Friday, total non-farm payroll employment in the US increased by 216,000 in December, and the unemployment rate was unchanged at 3.7%.
«Domestic equities are seeing some profit booking ahead of key inflation data globally and the start of corporate earnings this week,» said Sneha Poddar, associate vice president-equity research at Motilal Oswal Financial Services.
