Sensex, Nifty resume correction; sell-off may deepen on weak global cues

Sensex and Nifty resumed correction on Thursday amid weekly expiry of derivatives and weak global markets. Sensex fell 582 pts to 78,886 and Nifty ended 180 points lower at 24,117. Asian Paints, Infosys, PowerGrid, L&T and Ultratech Cement were the top Sensex losers, falling up to 3.21% today. Of 30 Sensex stocks, 23 ended in the red.

Market cap of BSE-listed firms fell by Rs 2.82 lakh crore to Rs 445.75 lakh crore against Rs 448.57 lakh crore on Wednesday. 

Analysts attributed today’s correction to the weekly expiry and weak global cues. They see more volatility in the market going ahead.

Shrikant Chouhan, Head Equity Research, Kotak Securities said, "Technically, market is consistently facing selling pressure at higher levels. From the day's highest levels, Nifty and Sensex shed over 250/800 points. A bearish candle on daily charts and double top formation on intraday charts indicates further weakness from the current levels. For the day, traders intraday texture is non-directional hence level based trading would be the ideal strategy. For Nifty/ Sensex 24,100/78,800 and 24,250/79,300 are the important levels to watch out. Above 24,250/79,300, the market could move up to 24,350-24,400/79,700-80,000. On the flip side, below 24,100/78,800 selling pressure is likely to accelerate. Below the same, it could slip till 24,000-23,925/78,500-78,250."

Vinod Nair, Head of Research, Geojit Financial Services said, "The domestic market reversed its earlier gains as the RBI's decision to hold its current policy with a caution to revise upward the CPI and moderate the growth forecast for Q1. Meanwhile, the global market is focusing on US jobs data amid concerns the US economy is headed for a recession, forcing the Federal Reserve to cut rates faster than initially expected."

Ajit Mishra – SVP, Research, Religare Broking said, “Markets struggled to maintain Wednesday's recovery, ending over half a percent lower due to weak global cues. After an initial dip, Nifty showed volatile movements, closing near the day's low at 24,117. Sectors such as IT, metals and energy were the hardest hit. However, the broader indices outperformed slightly, posting only minor losses. The ongoing global uncertainty is making market participants cautious, and short-term relief seems unlikely. The Nifty is encountering resistance around the 24,350 mark, and a decisive break below 23,900 could lead to a further fall. Traders are advised to adjust their positions with a hedged strategy to navigate the current volatility.”

Aditya Gaggar, Director of Progressive Shares said, “Amid extreme volatility, Nifty settled the weekly expiry day on a weak foot at 24,117.00 with a loss of 180.50 points. Among the sectors, pharma was the best performer while IT and metal corrected the most. With a marginal loss of over 0.30% midcaps and smallcaps outperformed the frontline Index. The index is oscillating in a wide range where the downside seems to be protected at 23,965 (near 50DMA) while the higher side is capped at 24,330 (bearish gap zone) and a breakout on either side is a must for a clear picture.”

Market in numbers

As many as 235 stocks hit their 52-week highs today. On the other hand, 25 shares touched their 52-week lows on BSE. 

Market breadth was negative. Of 4014 stocks traded, 1,829 stocks were trading in the green. Around 2,083 stocks were trading in the red while 102 stocks remained unchanged.

IT, capital goods, consumer durables and metal shares were the major losers with their BSE indices falling 726 points, 640 pts, 684 pts and 633 pts, respectively. 

FII-DII data

Foreign institutional investors sold Rs 3314 crore worth of equities on a net basis on Wednesday, while domestic investors bought Rs 3,801 crore of shares, as per provisional NSE data.

Previous session 

Sensex and Nifty ended higher on Wednesday after falling for three sessions amid a rally in the global markets. Sensex climbed 875 pts to 79,468 and Nifty ended 305 points higher at 24,297.