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Sensex, Nifty extend losses to fifth day, hit fresh 52-week lows on F&O expiry as bears tighten grip

Domestic stock markets started with gains but failed to hold on to them as bears wreaked havoc and forced Sensex and Nifty to hit fresh 52-week lows.

Sensex tanked 1,045 points or 1.99% to end at 51,495 points while the NSE Nifty 50 index fell 331 points or 2.11% to settle at 15,360. (Image: REUTERS)

Bears continued to tighten their grip on Dalal Street on the weekly futures & options (F&O) expiry session today. Domestic stock markets started with gains but failed to hold on to them as bears wreaked havoc and forced Sensex and Nifty to hit fresh 52-week lows. Sensex tanked 1,045 points or 1.99% to end at 51,495 points while the NSE Nifty 50 index fell 331 points or 2.11% to settle at 15,360. Nestle India was the only Sensex stock to end with gains, up 0.36%. Among the other 29 stocks that were in red, the worst performer was Tata Steel, down 6.32%. Tech Mahindra, IndusInd Bank, Bharti Airtel, and Bajaj Finance followed. Bank Nifty was down 2.17% while India VIX zoomed 3.25% to regain 22 levels.

Deepak Jasani, Head of Retail Research, HDFC Securities –

Nifty has breached the crucial support of 15660-15700 and this level will now act as a resistance. On falls 15315 could give some support, failing which the Nifty could head towards 14340 levels over the next few days/weeks. Rate hike fears have depressed expected valuations of stocks on the one hand, while making debt instruments attractive. Stubbornly high inflation is impacting sentiments while fears of recession (that could bring down inflation) could lead to earnings downgrades.

Palak Kothari, Research Associates, Choice Broking –

“On Technical Front, The Nifty has formed Big Bearish Marabozu Candle on a daily chart and given closing below 21 MMA which suggest downside movement in the counter. Furthermore, Nifty has faced resistance from 15860 levels and shows selling pressure & given breakdown of its horizontal line as given closing below the same which is a sign of more weakness in the trend. The Nifty may find support around 15240 levels while on the upside 15860 may act as an immediate hurdle. On the other hand, Bank nifty has support at 32300 levels while resistance at 33800 levels. Over the Nifty is looking weak on chart and breaching below 15240 can show 15000 levels.”

Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities –

“The Nifty index witnessed a major breakdown after the FED meet outcome. The index after the fall is trading near the next support level of 15,300 and if fails to sustain this will witness further downside 15,000-14,800 levels. The index upside resistance is at 15800 where an aggressive call writing has been witnessed and a close above this will resume the uptrend.”

Vinod Nair, Head of Research at Geojit Financial Services –

“Market is catching up to the reality that tight monetary policy is the lone card on the table lingering on high inflation. Valuations continue to trade on the marginally upper side of long-term averages and FIIs continue the selling mode. The stocks trading at high valuations & sectors like IT & Metals are the most impacted firms. In such a situation, preservation of capital is the theme by investing in a balanced portfolio of equity, debt & cash. In equities, safe sectors will be those that are least impacted by inflation & aggressive policy like Finance & Services. Defensives like Consumption, IT, Pharma & Telecom can also be considered on a long-term basis.”

S Ranganathan, Head of Research at LKP securities –

“FED effect coupled with a delayed start to the southwest monsoon wrecked havoc as the Nifty caved in below 15400 for the first time in the last one year. As the street prepares for further front-loaded action by central banks in a bid to anchor spiralling inflation, its impact on consumer spending kept investors on the backfoot. A mere glance at the stocks hitting one-year lows today is reflective of the risk-off mood on the street as only a handful of FMCG stocks displayed a green tick among front liners.”

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