Nifty, Sensex End Lower In A Truncated Week As HDFC Bank, Axis Bank Drag: Market Wrap

India's benchmark stock indices ended lower in a truncated week on Thursday, weighed by losses in index heavyweights HDFC Bank Ltd. and Axis Bank Ltd.

On a weekly basis, the indices closed lower for the second week, with the Nifty and the Sensex falling 1% this week.

The NSE Nifty 50 settled 101.35 points, or 0.47%, lower at 21,352.60, and the S&P BSE Sensex fell 359.64 points, or 0.51%, to end at 70,700.67.

"Domestic equity markets witnessed a correction in a shortened trading week. Nifty 50 and Sensex 30 corrected by 1% this week," said Shrikant Chouhan, head of equity research at Kotak Securities.

"Globally, the markets reacted to news with respect to a potential China rescue package. China's central bank said it will cut banks' reserve ratios in early February. Investors will be keeping an eye on the monetary policy decision from the European Central Bank and the fourth-quarter US GDP data," he added.

"The sentiment may continue to lean towards the bears as the Nifty struggles to surpass the 21,500 mark, where call writers held substantial positions. Looking ahead, the trend is likely to remain sideways, fluctuating within the range of 21,300 and 21,500. Nevertheless, a decisive breakthrough above 21,500 could propel the index towards 21,700/22,000 in the short term," said Senior Technical Analyst Rupak De from LKP Securities.

HDFC Bank Ltd, Bharti Airtel Ltd, ITC Ltd, Tech Mahindra Ltd, and Axis Bank weighed on the Nifty 50.

ICICI Bank Ltd, Reliance Industries Ltd, Bajaj Auto Ltd, NTPC Ltd, and Adani Ports & Special Economic Zones Ltd capped losses in index.

The benchmark indices logged weekly losses for the second consecutive week. The S&P BSE Sensex declined 1.01%, and the NSE Nifty 50 declined 1.02%.

This week on the NSE, 11 sectors fell, with the Nifty Media slumping 10% to become the worst performer among its peers. Only Nifty Pharma gained 1.7% to be the best performer.

"BSE Midcap and BSE Smallcap indexes also ended lower for the week. On the sectoral front, the majority of indices were lower. The BSE Realty and BSE Bankex index declined by 3-5% this week. On the other hand, the BSE healthcare index posted positive gains," Kotak Securities' Chouhan said.

The broader markets were mixed with the BSE MidCap closing 0.36% lower and the BSE SmallCap ending with 0.54% gains on Thursday. Eleven out of the 20 sectors compiled by BSE Ltd. advanced, while nine declined.

The market breadth was skewed in the favour of buyers. As many as 2,141 stocks advanced, 1,673 declined and 85 remained unchanged on the BSE.