Domestic stock markets wiped out all of the 2021 gains and turned negative. The S&P BSE Sensex closed 937 points lower on Wednesday and Nifty finished below 14,000, prolonging its fall after the 30-stock index hit the historic feat of 50,000 last week. Investors were left poorer by Rs 2.59 lakh crore after today’s bear attack. Only 6 of the 30 Sensex components finished in the green while heavyweights like Reliance Industries, ICICI Bank, HDFC, HDFC Bank were all in the red. The larger markets followed the benchmarks and closed in red, with the exception of Nifty Smallcap 50 which closed with gains.
Sahaj Agrawal, Head of Research – Derivatives at Kotak Securities –
“Nifty has passed a critical level of 14,000; this, combined with negative market health, should lead to additional selling pressure. The next support for Nifty is seen at 13500-13700 off levels. We believe that the level below 14000 is a good area to accumulate in the medium to long term in terms of risk-reward. Expect volatility to remain high and watch out for signs of a reversal before taking an aggressive position. “
Vinod Nair, Research Manager at Geojit Financial Services –
“It is well known that a decline in FII inflows will be the biggest risk to the liquidity-induced rally. Indian stock exchanges reflected mixed sentiment from their global peers with a rally lower due to consecutive days of FII selling. With the exception of the defensive FMCG segment, all sectors traded in the red zone, with banking and pharmaceutical stocks being the hardest hit. Global markets were mixed today ahead of the US Fed meeting amid US stimulus uncertainty. We should expect higher volatility in the coming days given the risk of a pre-budget event. “
S Ranganathan, Head of Research at LKP Securities –
“Markets saw a 2% reduction in indexes today even as the IMF recorded an impressive 11.5% growth for India in 2021, the highest of any major economy in the world. The automotive, metals and finance sectors were the most affected by sales as we saw a slowdown ahead of the Union budget. The lack of buying FII this week also added to the nervousness in trading on Wednesday afternoon.
Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities –
“The Nifty-50 broke the 14,000 level today even though other Asian and European markets are down slightly. The decline could be due to the reservation of profits by FIIs and other participants in the M&O segment since tomorrow is the monthly expiration. A certain unfolding of positions is visible before the budget event. If Nifty-50 keeps below 14,000 for the next two days, the likelihood of it testing 13,000 increases. We have to wait until tomorrow’s expiration close to see if the Nifty-50 maintains the 14,000 mark. “
Manish Shah, Founder, Niftytriggers –
“Nifty declined for the fourth day in a row and from her all-time high, Nifty lost 780 points. Nifty has crossed an uptrend line and we see four days of strong red candles. Nifty should see at least a temporary stop around 13,750, which is 61.8% of previous swing levels. Nifty’s chances of rallying before the expiration ends are high and traders should take note. The MACD Histogram is now oversold and the RSI has dropped below 50. In a bull market, the RSI area of 40 acts as support. Remember that the larger scale trend is always up and all short trades are countertrend. Expect a reversal of Nifty or at least a short-term rebound of around 13750-13660. “