It’s election jitters on Dalal Street…The indices slumped in late trade on Thursday, falling over 1% each. The Nifty 50 plunged 345 points or 1.55% to finally settle the day’s trading at 21,957.50. Sensex plummeted 1062.22 points or 1.45% to close the day’s trading at 72,404.17. HDFC Bank, L&T, Reliance Industries, ITC, and ICICI Bank saw maximum pain. BPCL, Asian Paints, Coal India, and ONGC were amongst other significant losers.
Sectoral indices under selling pressure
The Nifty Midcap 100 closed 927.15 points or 1.85% to finish the session at 49,109.15. Nifty Bank closed in the red, down 533 points or 1.11% at 47,487.90.
On the sectoral front, energy, capital goods, and metal stocks dragged the indices most. In the broader market, smallcap and midcap stocks closed in the red. Bucking the trend, auto was the only sectoral indices to outperform in Thursday’s crash.
Technically, after a muted opening market breached 22200/73200 support level and post breakdown the selling pressure intensified.
“On daily charts, the index has formed long bearish candle, which supports further weakness from the current levels. We are of the view that, the short-term market texture is weak but due to temporary oversold conditions, we could see a one-technical pullback rally from the current levels. For the traders now, 22000/72550 would act as a key level to watch out for. Above 22000/72550, the market could bounce back till 22100-22150/72300-72500. On the flip side, below 22000/72550 the weak sentiment is likely to continue below which the market could slip till 21850-21800/72100-72000,” said Shrikant Chouhan, Head Equity Research, Kotak Securities.
Markets might slip further
“The broader market witnessed volatility, underscoring caution on account of Q4 earnings and general election uncertainties, which led investors to stay on the sidelines. We expect the trend to continue in the short term as the market slid below the physiological level of 22,000. The global indices are trading with mixed cues ahead of the BOE policy meeting later today and US inflation figures due next week,” said Vinod Nair, Head of Research at Geojit Financial Services.
Bank Nifty
“The Bank Nifty is also approaching the lower end of the rising channel placed at 47200 – 47000. The 20-week average is placed at 47244. So the bank nifty is approaching multiple support levels which can help to restrict the fall. Overall, the Indices have been falling and now approaching crucial make-or-break levels, said Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas.
Affect on Rupee
The rupee closed flat at 83.50, initially with marginal gains but later surrendered them due to a capital market sell-off, limiting its upward movement. “The session was characterized by sideways trading and a lack of significant data on the dollar index. The rupee’s range is expected to remain between 83.25 and 83.70 in the near term,” said Jateen Trivedi, Vice President of Research Analyst – Commodity and Currency at LKP Securities.