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Monday Market Mayhem: Nifty, Sensex tank 2.5% amid weak global cues, volatility to persist; buy on dips

Bears gripped Indian equity markets on Monday as investors across the world avoided risky assets. The BSE Sensex plunged 1,776 points intra-day before closing at 52,847, down 1,457 points or 2.68%, while NSE Nifty 50 fell 427 points, or 2.64%, to settle at 15,774.

bse sensex, nse nifty, stock market crash
Sectorally, all the indices sunk on the NSE with the Nifty IT and Media indices sliding 4% each, and the Nifty Bank tanking over 3%

Bears gripped Indian equity markets on Monday as investors across the world avoided risky assets. The BSE Sensex plunged 1,776 points intra-day before closing at 52,847, down 1,457 points or 2.68%, while NSE Nifty 50 fell 427 points, or 2.64%, to settle at 15,774. The index touched a low of 15,684 in intra-day trade. In the broader markets, the Nifty MidCap 100 and SmallCap 100 declined 2.9% and 3.8%, respectively. Sectorally, all the indices sunk on the NSE with the Nifty IT and Media indices sliding 4% each, and the Nifty Bank tanking over 3%. Meanwhile, bond yields rose and emerging markets’ currencies hit fresh lows against the US dollar.

Pankaj Pandey, Head – Research, ICICIdirect

“The global as well as Indian equities has witnessed sharp correction recently amid the worries over US inflation and possible aggressive Fed policy tightening while Covid-19 warning from Beijing has also added to concerns about global growth. Investors also await consumer inflation data in India. On the equity market outlook, while we believe volatility may remain in the near term, the recent trough gives an opportunity to the long-term investors to load up on quality companies with sustainable growth visibility. On the medium term, we continue to remain constructive on domestic consumption, capital goods and allied space and domestic manufacturing plays.”

Vinod Nair, Head of Research at Geojit Financial Services

“The correction in the global markets is due to a double whammy of upcoming policy rate hikes and cuts to the central bank’s balance sheet.  Higher-than-expected US inflation data added fuel to the already wrecked market which was factoring in a 50bps hike in the Fed rate. The weakened rupee, persistent FII selling along with the anticipation of elevated domestic CPI numbers gripped domestic markets in fear. We will continue to trade with high volatility, however medium to long-term risk takers, should start chip-in to the market because this could be in the last phases of the consolidation”

Deepak Jasani, Head of Retail Research, HDFC Securities

“Nifty came under selling onslaught and touched multi month lows as fears that aggressive rate tightening by Central Banks could lead to recession unnerved investors. Investors who are under invested in equities can start to deploy money in a staggered manner while those who are fully invested can sell some stocks and raise cash on rises. Nifty needs to stay above 15671 level to prevent further damage. 15336-15431 band could be a good support for Nifty from where we could witness a short term bounce.”

Mohit Nigam, Head – PMS, Hem Securities

“Benchmark indices ended the day’s session on a negative note, with Sensex and Nifty 50 ended a session with losses, aided by IT, Metal and Private Bank as global sentiment soured after the US inflation data came in at 4 decades high. This is the worst day for Nifty 50 in three weeks and the worst day for Sensex in three months. Nifty 50 closes its day at above good resistance zone of 15,700 and if index holds above this mark for coming trading sessions then we may see more upward move towards 16,00-16,200 mark which are another resistance zone on the upside. The market breadth is skewed in the favour of bears. Crucial support for Nifty 50 is 15,500 while Nifty may face some resistance at 16,300.”

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

“The market crashed with full force on the first day of the week, as benchmark indices slumped below their crucial levels on across-the-board selling pressure. There have been heightened concerns amongst investors that central banks will be more aggressive in the coming months to hike interest rate hikes in order to combat inflation, which will in turn hurt economic growth and put margins under pressure. Markets were also down due to continued strength in Brent crude prices, 10-year bond yields rising to 3.20% from recent lows of 2.80%, and the expected CPI numbers. The fear and uncertainty was clearly visible in India’s VIX, which is up over 15% at 22.50. Technically, if the Nifty breaks and closes below 15700, it will be a major downside event for the market. In such a situation, the index would fall to the level of 15500-15400 in the short term. It is advisable to reduce a weak long position below the 15700 level. Also, Bank Nifty could drop to 32000 level if it ends below 33500.”

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