Dalal Street Corner: Bears grip market as it witnesses worst weekly fall in year; what should investors do on Monday?
The BSE Sensex plunged around 1700 points, while the Nifty50 closed below 17050-level on the back of renewed Covid fears, and weak global cues today.
Post a volatile session this week, the bears gripped Friday’s session, aiding the market to the worst weekly fall since January 2021. The BSE Sensex plunged around 1700 points, while the Nifty50 closed below 17050-level on the back of renewed Covid fears, and weak global cues today.
Following the benchmark indices suite, the broader markets such as the mid and small-cap indices plunged around 3 per cent at the market close. The Nifty Bank, which contributes most to the Nifty50, also dragged the benchmark index. The 12-share banking index slipped by 1340 to 36025 at the close.
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Mere 4 stocks ended in the green, while the rest 46 stocks ended in the red on the Nifty50. Metal stocks such as JSW Steel, Hindalco, and Tata Steel dipped between 5-7 per cent, followed by auto stock such as Tata Motors, Maruti, and M&M each down between 4-5 per cent at the market close.
Defensive stocks from the pharma and FMCG sector were the only gainers today, with Cipla being the top gainer by over 7 per cent, followed by Dr. Reddy up 3.5 per cent, Divis Lab around 3 per cent, and Nestle India marginally gained by 0.4 per cent at the market close on the last day of the week.
Tarsons Products shares made a debut on exchanges with 6 per cent premium on the BSE. The gain against listing price was Rs 38 per share on its market debut on BSE. The stock was eventually locked at an upper circuit of 27 per cent hours after making a lukewarm listing on exchanges on Friday.
“Nifty has continued the breakdown of the Head & Shoulder pattern after retesting the neckline, which indicates bearishness in the index. Moreover, it has moved below 100 days SMA and formed Bearish Marubozu candle on the daily chart,” said Sachin Gupta AVP, Research, Choice Broking.
Gupta added, “The momentum indicator RSI & Stochastic has been trading at oversold territory. At present, the Nifty has support at 16700 levels while resistance at 17300 levels. On the other hand, Bank Nifty has support at 334800 levels and resistance at 36600 levels.”
Similarly, Vinod Nair, Head of Research at Geojit Financial Services pointed out, “Triggered by the new covid variant in South Africa, domestic markets plummeted into negative territory following weak global peers.”
On the domestic front, broad-based sell-off was witnessed as investors dumped covid-sensitive stocks while the focus was shifted towards the pharma sector amid growing concerns over the new variant with higher mutations, Nair added.
Ajit Mishra, VP - Research, Religare Broking Ltd also mentioned that the bears were in control from the beginning as a new variant of COVID raised concerns globally and they further tightened their grip as the session progressed.
“The way markets have closed on Friday, we expect more pain in the coming sessions. Apart from the global COVID-related update, markets will also be eyeing the domestic data like auto sales, GDP numbers, etc for cues,” Mishra added by highlighting the other main triggers in the coming week.
According to the analyst, “Since the Nifty has slipped below the critical support zone of 17,150, the next crucial support comes at 16,700. Traders should continue with the bearish bias and use the bounce to create shorts. And investors should see this as a buying opportunity for quality stocks.”
(Disclaimer: The views/suggestions/advices expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)
05:45 PM IST