Sensex tanks 1.5% in fag-end sell-off, Nifty support at 16800; hourly momentum indicator signals more weakness

BSE Sensex and NSE Nifty 50 ended with a cut of one per cent each on Tuesday, mirroring the global market trends. BSE Sensex tanked 844 points or 1.5 per cent to end at 57147, while NSE Nifty 50 plunged 1.5 per cent or 257 points to settle at 16984. Stocks of index heavyweights such as Reliance Industries (RIL), Infosys, ICICI Bank, HDFC Bank, and TCS among others contributed the most to the indices’ losses. Broader markets also fell in line with equity frontliners. S&P BSE MidCap index fell 1.6 per cent or 406 points to end at 24,757.61, while S&P BSE SmallCap index settled 1.5 per cent or 425 points down at 28,589.

Ajit Mishra, VP – Research, Religare Broking

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S Ranganathan, Head of Research, LKP Securities

India’s outperformance till date made a case for profit booking for the FIIs today as geopolitical and currency risks came to the forefront. Practically, all sectoral indices ended in the red with the Nifty closing below 17k on a day when nothing was spared. The broader markets too saw a steep correction in several stocks which have been defying gravity and moving up since the past several weeks.

Vinod Nair, Head of Research, Geojit Financial Services

Investors are becoming risk-averse due to rising geopolitical turmoil as well as worries about the global economic slump. Investors’ caution ahead of the announcement of inflation data prevented a better-than-expected start to IT earnings from improving market mood. However, as compared to global counterparts, domestic selling is not as aggressive since FII selling is primarily absorbed by DIIs.

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Palak Kothari, Senior technical analyst, Choice Broking

On the technical front, the Nifty formed a Bearish Marabozu on daily charts which suggests weakness in the counter. Nifty has given a closing below the middle band of Bollinger as well as 21 DMA which adds bearishness to the prices. On the OI Data, On the call side, the highest was witnessed at 17200 while on the put side was at 16800 level. The Hourly momentum indicator STOACHSTIC & MACD were trading with a negative crossover which suggests a downside moment in the upcoming session. The support for Nifty has shifted around 16800 levels while on the upside 17250 may act as an immediate hurdle. On the other hand, Bank nifty has support at 38200 levels while resistance at 39500 levels. Overall, Nifty can test the support level breaching below the same can show more downside rally.