Sensex crashed over 2,100 points in afternoon trade today after sell-off in global markets intensified with US carrying out air strikes in Syria. While Sensex tanked 2,149 points intra day to 48,890, Nifty lost 630 points to 14,467. Investor wealth fell by over Rs 6 lakh crore after BSE market cap plunged to Rs 200.12 lakh crore intra day.
Global markets fell after rising bond yields triggered a broad sell-off on Wall Street. Nasdaq fell 3.5% on Thursday while the S&P 500 dropped 2.4%, led lower by heavy selling in technology and communications companies.This hit Indian markets with the NSE volatility index India VIX surging 22.89% to 28.13.
Later, Sensex fell 1,939 points to end at 49,099.99 and Nifty plummeted 568 points to 14,529.
On Thursday, Sensex ended 257 points higher at 50,039 and Nifty gained 115 points to 15,097. With today's crash, Sensex and Nifty have snapped three-session gaining streak caused by positive global cues and government's move to lift the embargo on the grant of GOI business to private lenders. That took BSE market capitalisation to an all-time closing high of Rs 206.18 lakh crore on February 25, 2021.
However, with today's crash, Sensex and Nifty have turned negative for the week. While Sensex lost 1,789 points or 3.52%, Nifty fell 452 points or 3.02% during the period.
Investors lost Rs 5.42 lakh crore in wealth today with BSE market cap ending at Rs 200.77 lakh crore. The market crash in the last trading session of this week has left investors guessing about the trading strategy they should adopt in the near future. Here's a look at what experts said about the crash today and the future market outlook.
DR VK Vijayakumar, chief investment strategist at Geojit said," This is still a structural bull market. Corrections are normal and desirable in a bull market. Trading in a choppy market is risky. Traders can wait for a consolidation. Investors can utilise sharp corrections to buy quality stocks in IT, financials particularly private sector banking and economy facing segments like cement and metal stocks."
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking said, "Market did not have a great start to the March series as we saw huge gap down on the back of nervousness across the globe. With today's sell off, market has violated its key supports and hence, we expect the weakness to persist in the following session too. As far as levels are concerned, 50,000 - 50,400 are to be seen as strong hurdles and any bounce back towards it should be used to lighten up longs. On the flipside, we will not be surprised to see levels of 49,000 - 48,700 in the coming week."
Deepak Jasani, Head of Retail Research at HDFC Securities said, " Till the fears on the rise in bond yields globally recede, equity markets in India will continue to remain under pressure. Rallies could get sold into. Stock specific upmoves may continue in a very small band of stocks."
Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities said," Going forward the 50 DMA of Nifty-50 which works to14,447 could be a crucial support after which the next big support levels could be the 13,600. Nifty Bank Index which is currently at 35,100 has major support at its previous top breakout of 32,000. What we are seeing in Indian markets is a knee jerk reaction to the rise in global bond yields.
In the immediate future Indian markets could also bear the brunt of global correction but as time goes it could recoup and standout for three reasons: 1) India's V shaped recovery could be stronger than other economies because of the severe lockdown we went through last year.2) The low base caused due to last year's lockdown will provide very high earnings growth for the next three quarters
3) Since Pre-Covid India has added more than US$ 100 bn to its forex reserves. Due to the strong accumulation of reserves RBI could be in a better position to handle any currency weakness being caused by rising bond yields and potential FPI outflows. Stable currency, strong economy growth and sharp rise in earnings could help India sustain any global correction due to inflation and rising bond yields."
AR Ramachandran, Co-founder & Trainer, Tips2Trade said,"Due to geopolitical uncertainties caused by the US airstrike on Syria & fear of rising inflation fears indicated by the bond yields have clearly spooked global markets. Short term traders should not get adventurous & stay out. Nifty daily closing below 14469 could lead to a further sell off till 14280. 14850 will now act as a strong resistance. However, long term investors can look to buy consumer & pharma stocks for very good returns in the coming months."