The benchmark indices nosedived further. The Sensex was down over 1000 points.
At 12.11 PM, the Sensex was down 1,316.19 or 2.27 percent at 56,541.96. The Nifty was down 387.25 points or 2.23 percent at 16,890.70 from its previous close.
At 10.53 AM, the Sensex was down 1.79 percent or 1,038.16 points at 56,819.99. The broader Nifty was down 1.79 percent or 308.75 points at 16,969.20.
Parth Nyati, Founder, Tradingo, said, Globally markets are very volatile amid hawkish US Fed and rising geopolitical tension and Indian markets are also facing the same pressure due to heavy FIIs' selling. If we look at the Indian markets then there are lots of positive triggers that may help our market to outperform but we just need some calmness in global markets. "
The market is not going into the Budget with any euphoria. So there is a good chance of a post-Budget rally and if we look at the last three years' trend then the Market corrects ahead of budget then it witnesses post-budget rally.
Nifty is trying to find its feet near a strong support zone of 16,850-16,600 after a brutal fall. The market was looking much oversold as PCR was slipped below the 0.7 mark and FIIs' long exposure in the index future dipped below 45 percent therefore a bounceback is due.
Technically, 16,800 is long-term trendline support and a previous demand zone while 200-DMA is placed around 16,600 level therefore we can expect a pullback rally from here. On the upside, the 17,500-17,600 area will be the first resistance zone while above 17,800, we will get confidence that the market has reversed and is ready to go higher, Nyati added.
Prashant Tapse from Mehta Equities said, "Volatility will be the hallmark in near-term trading strategy. Overnight Wall Street, Federal Reserve comments ruptured ‘Tuesdays cover up Rally’. Technically speaking, Nifty’s daily charts are suggesting that the recent market sell-off is overdone amidst oversold conditions. Key supports are seen at psychological 17,000-mark. A break below 16,900 will trigger declines towards 16,410 (low as on 20th December 2021). So, on the downside, the benchmark Nifty needs to hold above 17,280-mark for any meaningful recovery. Confirmation of strength only above Nifty 17,777-mark."
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd said, "Markets are down mainly on the hawkish Fed outlook. Jerome Powell, Chairman of the Federal Reserve, signalled a rise in interest rates in March and predicted the possibility of an unexpectedly aggressive policy tightening. This has led to an increase in the 10-year bond yields of the US and the dollar index, which is negative for emerging markets. Tensions between Russia and Ukraine have pushed up crude oil prices. With all these headwinds, the market today is facing a monthly expiration date for January FNO contracts, which has added to the volatility."
Federal Reserve Chairman Jerome Powell on Wednesday said the central bank “is of a mind” to raise interest rates in March as part of an effort to combat the highest inflation in decades. Yet Powell was less certain when the Fed will begin to reduce the balance sheet. “We are going to be led by the incoming data and evolving outlook,” he said.
Powell told reporters there was significant room to raise interest rates without hurting the labor market and didn’t rule out the prospect of rate increases larger than 25 basis points given the scope of the inflation challenge.
