Friday crash: Sensex gives up 81k, Nifty ends below 24,800; is ‘sell on rise’ back on D-Street?

Sensex and Nifty snapped their five day gaining streak on Friday as weak global cues dampened sentiment on Dalal Street. The correction came a day after benchmark indices hit fresh record highs in both intraday and closing basis. In fact, Nifty managed to close above the key 25,000 mark on Thursday.

However, sellers regained control today with Nifty ending 293 pts lower at 24,717 and Sensex losing 886 pts to 80,982.

With today’s correction, Sensex and Nifty snapped their gaining streak of eight weeks.

Rupak De, Senior Technical Analyst, LKP Securities said, "Nifty has slipped sharply amid a global sell-off. Technically, it has drifted down after forming a spinning top on the daily timeframe. The RSI indicator has turned downward, indicating a bearish crossover. The market appears to be favoring 'sell on rise' traders as long as it remains below 24,800. On the downside, Nifty might drift towards 24,530 or 24,400."

Investor wealth declined by Rs 4.46 lakh crore to Rs 457.16 lakh crore compared with a valuation of Rs 461.62 lakh crore recorded in the previous session. 

Stocks such as Maruti, Tata Motors, JSW Steel, Tata Steel, L&T and M&M led the losses on Sensex, falling up to 4.63%. Of 30 Sensex stocks, 25 ended in the red.

Vinod Nair, Head of Research, Geojit Financial Services said, "The domestic market saw a broad-based sell-off, indicating that it may have reached an exhaustion point due to a lack of new triggers for further upward movement. Q1FY25 earnings have been lackluster so far, while broader market valuations remain significantly high. Meanwhile, despite the US Fed hinting at a rate cut in September, global markets are consolidating as this move has already been priced in. Additionally, weak earnings from the US IT sector, a potential rise in unemployment, the possibility of further rate hikes by the BOJ, and a slowdown in China's growth are all dampening market sentiment.”

Market breadth was negative as out of 4033 stocks traded, 1705 stocks ended in the green on BSE. Around 2,212 stocks closed in the red while 116 stocks remained unchanged.

Around 60 stocks hit their lower circuits as the stock market tanked in the early morning session. On the other hand, 101 shares hit their upper circuit limits, defying the negative sentiment on BSE.

 Ajit Mishra – SVP, Research, Religare Broking said, “Nifty struggled to surpass the hurdle at 25,100, and Friday's close suggests a potential further dip toward the immediate support zone around the 20-day EMA around 24,500 level. Besides earnings, participants are also taking cues from the global front, particularly the US, which has been experiencing significant volatility recently. Given this scenario, it is advisable to limit overnight leveraged positions and opt for hedged trades.”

Previous close

Nifty 50 rose 0.24% to 25,010.9, and the Sensex added 0.15% to 81,867.55. Both indices ended at their record highs.