Silencing Bell: Market mayhem: Nifty, Sensex fall nearly 3% on global sell-off

Market Closed | Sensex, Nifty down around 3%
Indian benchmark indices fell over 2.5 percent on August 5 with the Nifty at 24,050. At the close, the Sensex was down 2,222.55 points or 2.74 percent at 78,759.40 and the Nifty was down 662.10 points or 2.68 percent at 24,055.60.

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Silencing Bell: Market mayhem: Nifty, Sensex fall nearly 3% on global sell-off

Prashant Tapase, Senior VP (Research), Mehta Equities
Local equity indices have come under carnage from global markets such as fears of a recession due to weak jobs data in the US, interest rate hikes in Japan that weigh on yen-carrying trades and a host of external factors such as escalating conflicts. Middle East. . Massive sales have started across the board. In the past such corrections were temporary and we saw the market rebound quickly. But we fear that this time will be quite different from history.

Our advice to traders is to trim trading positions or look for tight stop losses on either side of the trade and option writers should be cautious. Investments with a 2/3-year horizon may be considered for allocation of funds in a phased manner. Technically, Nifty closing below 24000 will be seen as sentimentally negative with support at 23800 and any move above 24,125 will push the index towards 24,200 and 24,300 levels.

Jatin Gedia - Technical Research Analyst at Sharekhan by BNP Paribas
Nifty opened gap down and traded with negative bias throughout the day. It closed down ~670 points today. Nifty broke the budget day low of 24075 and thus violated the uptrend. It closed decisively below the 20-day moving average (24575) indicating weakness.

We believe that the Nifty is in the process of retracing the rally seen between 21280 - 25078. Fibonacci retracement levels 23628 and 23280 are the 20-week moving averages. An immediate barrier is placed on the upside at 24300 – 24350.

Bank Nifty also breached the previous swing low of 50440 and closed suggesting a continuation of decline and is likely to move lower towards 47650 - 47500 where the 200-day moving average is placed. The 20-week moving average is placed at 49800, which may provide some relief but a rally towards 50400 - 50500 should be used as a selling opportunity.

Ajit Mishra - SVP, Research, Religare Broking
Markets fell over 2.5% on Monday due to weak global cues. After a gap-down start, the Nifty moved lower throughout the day, briefly breaching the 50-day EMA support zone around 23,950 before closing at 24,055.60. All major sectors were in line with the benchmark, with realty, metals and energy being the top losers. Broader indices also fell between 3.6% and 4.6%.

Going forward, we see continued volatile swings with a negative bias due to several global headwinds, including unwinding the yen carry trade, recession fears in the US and rising tensions in the Middle East.

On the index front, we are eyeing 23,250-23,400 zone as key support for Nifty, while 24,500-24,700 zone will act as resistance in case of rebound. Traders should adjust their positions accordingly and prefer a hedged approach. On the other hand, investors should see this correction as an opportunity to accumulate quality stocks at lower levels.

Vinod Nair, Head of Research, Geojit Financial Services
Global markets went into cautious mode following disappointing US jobs data and unwinding in carry trade following a sharp rise in the yen. The impact was seen in the domestic market as well and it is expected to have an impact in the near term.

However, the market showed resilience from the day's lows and recovered to close above 24,000.

Historically, the Indian market has shown a solid track record of outperforming the global market over the long term. This trend is expected to continue as GDP growth is forecast to remain robust during the decade supported by progressive policies, fiscal prudence and a favorable political landscape.

Comments

  1. The 20-week moving average is placed at 49800, which may provide some relief but a rally towards 50400 - 50500 should be used as a selling opportunity.

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