The fall in Sensex and Nifty was on the back of rising coronavirus infection cases which unnerved global markets.
As bears took over the markets, BSE Sensex and Nifty 50 snapped their 4-day gaining streak and ended lower on Wednesday due to sell-off in banks and financial stocks. Sensex hit an intra-day high of 35,706, however, due to sell-off in the last hour, the 30-share index plunged 837 pts from day’s high point and settled at 34,869. While the broader Nifty 50 index finished trade at 10,305, down 166 points or 1.58 per cent. The fall in the markets was on the back of rising coronavirus cases which unnerved global markets. Similarly, the cases in India too, continue to spike which weighed on investor sentiment. IndusInd Bank and ICICI Bank were the top losers on BSE Sensex and Nifty 50. On the flip side, Asian Paints and ITC topped the gainers pack.
What led to a sharp fall in Sensex, Nifty?
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“Markets witnessed sharp correction, ahead of monthly F&O expiry tomorrow, coupled with negative global cues,” Aamar Deo Singh, Head Advisory, Angel Broking told Financial Express Online. “News of Co-operative Banks coming under RBI supervision seems to have spooked the banking stocks. On the downside, Nifty has support around 10,000-10,050 levels whereas upside seems to be capped around 10,550-10,700 levels in the short-term,” he added.
Record infection cases in US and India-China geopolitical tensions kept the traders cautious. “The daily price action has formed an “Engulfing Bearish” candle which remains a trend reversal pattern however any follow up down close will confirm the above said pattern,” Rajesh Palviya, Head Technical & Derivatives, Axis Securities, told Financial Express Online. He further explained that this pattern has also been observed around 200 day EMA (10520) hence on the upside 10520-10550 remains a crucial level to watch for. “Once Nifty manages to cross above 10550 on closing basis then we may see Nifty to scale up towards 10700-10800 in the short term” Palviya added.
India VIX, the volatility index, gained over 2 per cent to 29.99 levels today. Of 11 sectoral indices, 10 ended in a deep sea of red while just one settled with gains. Nifty Private Bank index fell over 4 per cent while Nifty Bank was down 3.76 per cent. While Nifty FMCG gained nearly half a per cent.