The benchmark Indian bourses ended negative for the second consecutive day. All the sectoral indices ended in the red with metal, IT indices fell 4-5 percent. On the back of global clues and SGX, the Nifty opened on a gap down note and continued downside momentum throughout the day and closed the session with a loss of 430.90. VIX closed at 24.56 up by 10.13 percent which is a sign of more volatility in upcoming sessions.
The BSE midcap and smallcap indices lost over 2 percent each.
At close, the Sensex was down 1,416.30 points or 2.61 percent at 52,792.23. The broader Nifty was down 430.90 points or 2.65 percent at 15,809.40. About 838 shares have advanced, 2,413 shares declined, and 122 shares are unchanged.
Around 47 stocks out of NIFTY 50 closed in red, which suggest broad-based selling. Wipro, HCL Technologies, TCS, Tech Mahindra and Infosys were among the top Nifty losers, while gainers included ITC, Dr Reddy's Laboratories and Power Grid Corporation.
Palak Kothari, .daily chart, Nifty has formed a Bearish candle which indicates downside momentum for an upcoming session. Moreover, Nifty is facing support from horizontal line i.e., 15,750 levels which is make or break level. In addition, Nifty has been sustained above the 21-Monthly Moving Average which indicates a bounce back from lower levels can be seen. However, the momentum indicators MACD & Stochastic were trading with a negative crossover & trading in oversold zone which is a sign of sideways to negative trend in Nifty. The Nifty may find Strong support around 15,700 levels, breaching below it can show more downside till 15,500 levels while on the upside 16,000 may act as an immediate hurdle. On the other hand, Bank nifty has support at 32,800 levels while resistance at 34,500 levels.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said the rout in other Asian indices and European gauges triggered a massive sell-off in local equities as both Sensex and Nifty ended below their crucial psychological levels of 53k and 16k, respectively. Investors fretted over stagflation risks and Federal Reserve's more hawkish stance to rein in inflation by opting for more rate hikes, which would have a bigger impact on the economy going ahead. Till the time FIIs remain net sellers, the south-bound journey will be difficult to reverse. In addition, post gap down opening, the Nifty has formed a bearish candle which indicates further weakness from the current levels.
Currently, the index is trading near 15,700-15,750 support level, hence a quick pullback rally is not ruled out if the index succeeds to trade above 15,700. For traders, as long as the index is trading below 15,900, the correction wave is likely to continue and below the same it could retest the level of 15,700. On the further down side, the index could slip to 15,600. On the flip side, above 15,900, the Nifty could move up to 16000-16,100 levels, Chouhan added.
Mohit Nigam, Head - PMS, Hem Securities, said, Benchmark indices made a gap-down opening today amid global sell off. US markets witnessed its biggest fall since June 2020 as inflation fear looms. Rising inflation in US and downgrade of global economic forecast is the major cause for global sell off. Investor sentiments got a hit after the hike in LPG prices. Nifty IT was the biggest dragger and fell almost 6 percent. On the technical front, the key resistance levels for Nifty50 are 16000 and on the downside 15600 can act as strong support. Key resistance and support levels for Bank Nifty are 33,700 and 33,000 respectively.
Arun Malhotra, Founding Partner & Portfolio Manager, CapGrow Capital Advisors said, the global cues are quite negative. The continuous FII selling is putting pressure on the markets. Domestic Institutions and retail have been buying but are quite saturated now since their recent purchases are coming down every day. This is making retain investors very nervous. The long-term investors should focus on the Large caps since a lot of value has emerged because the prices have been coming down, while the results and outlook have been strong. Volatility is the best friend for long-term investors. This downward spiral in prices of good quality scrips is giving a wonderful opportunity to own quality businesses at reasonable valuations, Malhotra said.
European, Asian stocks close in red
European and Asian stock markets followed Wall Street's worst day since mid-2020 on Thursday. Asian peers closed in red amid China’s Zero COVID policy, fears regarding increase in global inflation and incessant war between Russia and Ukraine.
MSCI's broadest index of Asia-Pacific shares outside Japan snapped its four-day streak of gains and slumped 2.3 percent, dragged down by a 1.6 percent loss for Australia's resource-heavy index, a 3.3 percent drop in Hong Kong stocks and a 1 percent retreat for blue chips in mainland China. Japan's Nikkei also skidded, shedding 2.5 percent.
FTSE 100 tumbles 2%
UK's FTSE 100 tumbled on Thursday as investors globally fretted over the broadening impact of inflation on economic growth and corporate profits, while Royal Mail slumped after reporting disappointing results. The blue-chip index dropped 2.1 percent, joining a rout in Asian and European markets after Wall Street's main indexes sank overnight due to a warning on margins from retail giant Target.
The FTSE 100 and the domestically focussed midcap indexes have lost almost 2 percent so far this week.
Data this week showed British inflation hit a 40-year peak in April, deepening worries about the pain inflicted on consumers and a potential recession.
Dollar eases
In the currency markets, the US. dollar eased back 0.3 percent against a basket of major currencies, after a 0.55 percent jump overnight that ended a three-day losing streak. The euro gained 0.4 percent on the ECB rate rise view, while the Aussie dollar gained 0.8 percent and New Zealand's kiwi dollar bounced 0.6 percent, helped by an easing of Shanghai's COVID lockdown in China.
Crude oil dips
Brent crude went from $110.41 to $108.25 per barrel in London trading, while US crude dipped to $108.78 a barrel, and gold, which has fallen more than 12 percent since March, clawed up to $1,822 per ounce.
(With inputs from Reuters, Agencies)
