After The Bell: Market ends in the red for second day, what should investors do on Friday?

Market Outlook

It was the second successive day of losses for the Indian market on March 25 amid unsupportive global cues and selling across sectors on the F&O expiry day. At close, the Sensex was down 740.19 points, or 1.51 percent, at 48,440.12 and the Nifty was down 224.50 points, or 1.54 percent, at 14,324.90.

Nifty PSU Bank, FMCG, auto, infra, IT and energy indices declined 2-3 percent. Broader markets mirrored the benchmarks, as BSE midcap and smallcap indices fell 1.8-2.2 percent.

All the S&P BSE sectoral indices ended in the red, with auto, power, oil & gas, FMCG and realty stocks slipping more than 2 percent each.

Among individual stocks, a volume spike of more than 100 percent was seen in SAIL and Vodafone Idea.

A long buildup was seen in SAIL, while a short buildup was seen in Maruti Suzuki, Info Edge and Cipla. More than 100 stocks, including Ambuja Cements, Adani Power, CG Power and JB Chemicals, hit a fresh 52-week high on the BSE.

Here is what experts suggest investors should do on March 26:

Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing weakness from the highs the previous day, the Nifty witnessed another free fall on March 25 amid volatility and closed the day 224 points lower.

The Nifty opened on a slightly positive note but started showing sharp intraday weakness from the early part of the session. A fine intraday upside bounce occurred towards the end but the market failed to hold on to it to finally closed near the day’s low.

The short-term trend for the Nifty continues to be weak and a decisive move below 14,300 could drag the index to 14,000 in the near term. This support is a mid part of a long bull candle of February 1 and also 20 period weekly EMA. Any upside bounce from here is expected to find resistance at 14,500.

Chandan Taparia, Derivative & Technical Analyst, Motilal Oswal Financial Services

The Nifty failed to continue its bullish momentum and ended the March series with a loss of 5.12 percent at 14,324. During the series, it made a high of 15,336 but sustained supply pressure was seen near 15,300, which took the index below 14,350. Till it remains below 14,550, weakness would be seen towards 14,200 and 14,000, while on the upside, hurdles are seen at 14,675 and 14,800.

The Bank Nifty saw a provisional rollover of around 85 percent, which is higher than its averages for the last three series. Higher rolls with negative market move indicate that shorts are being carried to the next series.

Ajit Mishra, VP – Research, Religare Broking

Markets traded under pressure on the F&O expiry day and lost over one and a half percent. The sentiment was downbeat from the beginning, on subdued global cues and the continuous uptick in COVID-19 cases in India. Though the benchmark tried to recoup losses in the second half, selling pressure at the higher levels pushed the bulls on the back foot.

Selling pressure has intensified in the last couple of sessions owing to weak global cues and concerns over the second wave of COVID cases. On the benchmark front, the next critical support for the Nifty is at 14,000, however, a rebound in the banking index might result in some bounce or consolidation first. We reiterate our cautious stance and suggest traders to focus more on risk management.

Ashis Biswas, Head of Research at CapitalVia Global Research

The Nifty witnessed some recovery from its short-term support of around 14,300. The level of 14,300 will act as major support and in the next few days, the market may stay in 14,300-14,700 range. To keep the long-term uptrend intact, it would be crucial that the market sustains above 14,300 to keep the long-term uptrend intact.

Deepak Jasani, Head of Retail Research, HDFC Securities

Indian benchmarks suffered sharp swings on either side on March 25 as the March series F&O expiry had a volatile close. A second sharp selloff after 14 45 hours meant that the Indices closed almost at the intraday low. At the close, the Nifty was down 224.5 points, 1.5 percent, at 14,324.90.

The Nifty has seen an acceleration in its downtrend after it breached the crucial level of 14,788. In the process, it has filled the up-gap made on February 2. A sharp rise in COVID-19 cases globally and reports of lockdown seems to have eroded investors’ risk appetite. Hardening bond yields and rising inflation are also not helping. Though the indicators are oversold, we are not sure as to whether a bounce will come from these levels or after falling to 13,966.

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