Both the domestic equity indices continued their losing spree for the sixth consecutive session on Friday, with the Nifty-50 hitting a 200-day EMA (exponential moving average) for the first time since April this year, while the Sensex plunged 900.91 points to 63,148.15.
The broader Nifty 50 tanked 264.90 points, or 1.39%, to 18,857.25, on Thursday, when bears remain at the helm as it slipped below the 19,000-mark for the first time in four months, indicating a rising bearish condition, said Rupak De, Senior Technical Analyst at LKP Securities.
The bearish crossover in the momentum indicator also supports the negative momentum. In the current scenario, supports are appearing very fragile and vulnerable. Despite the recent sharp decline, further correction from the current level seems highly possible.
Support on the lower end is visible at 18,600-18,645, while resistance is positioned at 18,950-19,000, De said.
Nagaraj Shetti, Technical Research Analyst at HDFC Securities, said the short-term trend of Nifty continues to be negative. Having moved into oversold region, there is a chances of upside bounce occurring from the lows. A decisive move below 18800 levels could open next downside of 18500-18600 levels in the near term.
Shares of fertiliser companies have declined after the government slashed subsidies for the upcoming Rabi season, said Deepak Jasani, Head of Retail Research at HDFC Securities.
On Wednesday, the government approved a Rs 22,303 crore nutrient-based fertiliser subsidy. The revised subsidy rates for nitrogen have been reduced 39%, while those for phosphorus fertilisers have been cut 49 per cent, potassium fertiliser subsidies have seen a 85 per cent cut, driven by falling input prices, he said.
The Nifty Metal and Nifty Auto were the top beaten down sectors, down by 1.62 per cent and 1.59 per cent, respectively, said Vaibhav Vidwani, Research Analyst at Bonanza Portfolio.
Axis Bank, HCL Technologies, Adani Ports, IndusInd Bank, and ITC were the top gainers on the Nifty, while the biggest losers were M&M, Bajaj Finance, Asian Paints, UPL, and Bajaj Finserv.
Oversold market: Expert
After six continuous days of losses triggered by the elevated bond yields in the US and tensions in West Asia, the market appears to be oversold, said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Shorting in the FPI overweight segments like banking and IT have contributed significantly to the sharp market correction, he said.
The US economy's resilience is surprising. The Q3 GDP growth at 4.9 per cent means the Fed will continue to be hawkish and the likely 'higher for longer' interest rate regime is negative from the stock market perspective, he added.
On the positive side, valuations in India, which were high, have now turned fair and in sectors like banking valuations are attractive. This is the time for cherry picking for long-term investors. History tells us that corrections triggered by geopolitical events were opportunities to buy, he added.
Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said Nifty has indicated "Three Black Crows" on the daily chart extending the slide further to touch the 18,850 zone achieving the initial downside target as mentioned earlier, with sentiment and bias maintained cautiously.
The index would have the crucial support maintained near 18,600 levels of the important 200 period MA below which the matter can turn worse with 18,200 level as the next major base zone. The support for the day is seen at 18,700 levels while the resistance is seen at 19,100 levels, Parekh said.
BSE Sensex is up 551 points at 63,699 points on Friday. SBI is up 2.4 per cent.
(With inputs from IANS)
