After The Bell: Investors lose nearly Rs 9 lakh crore in a day, what should they do on Tuesday?
The unrelenting record daily surge in coronavirus cases, fears of a lockdown in Maharashtra and tougher restrictions in other states battered the Indian share market on April 12, pushing the benchmark indices lower by more than 3 percent for the first time since February 26.
The S&P BSE Sensex plunged 1,707 points to 47,883, while the Nifty50 sank 524 points to 14,310.
The overall market capitalisation of BSE-listed firms fell to Rs 200.9 lakh crore from Rs 209.6 lakh crore in the previous session on April 9, making investors poorer by Rs 8.7 lakh crore in a single day.
Sectorally, selling pressure was visible in realty, infrastructure, public sector, metals, power, auto finance, and banking stocks. On the broader markets front, the S&P BSE midcap index was down more 5.3 percent, while the smallcap index closed lower by 4.8 percent.
The rise in COVID-19 cases and the possibility of lockdown in various states, including the economic powerhouse of Maharashtra, triggered risk-off sentiment. Trade shifted to defensive plays such as IT, pharma as well as FMCG.
“Further implementation of lockdowns and all-time high covid cases have dragged the market to a monthly low. This is expected to impact the economic growth of Q1fy23, more than thought earlier,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.
Implications for the banking and discretionary sector were presumed to be the highest, drifting market to defensives like IT, pharma and FMCG, he said. The trend would likely continue for a couple of trading weeks but cases are likely to reduce in the coming week, bringing growth back, he said.
Here is what experts suggest investors should do on April 13:
Rohit Singre, Senior Technical Analyst, LKP Securities
The Nifty closed with a loss of more than three per cent and formed a bearish candle on the daily chart. It breached most crucial support levels and now the day’s low of 14,250 would be the immediate support on the downside.
A break below the said level could lead to more pressure on the index and if it manages to hold, some bounce can be expected. A strong hurdle on the higher side is near 14,500-14,600 zone.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
After resisting at the 14,950-15,000 level, there has been no respite for the market. We have witnessed a single slope fall. However, one needs to be cautious at these levels of the index.
If it keeps below 14,250, the NIfty could slide to 13,800-13,900 sooner than later. In the short to medium-term time frames, this is the last support for the Nifty. For the index has to bottom out, “we need to respect the 14,250 levels and bounce from here”.
Ashis Biswas, Head, Technical Research, CapitalVia Global Research Limited
The Nifty witnessed a strong downward trend and a decisive breakdown below the support level of 14,500.
While a recovery above 14,500 is the key to changing the short-term bearish outlook, if the market stays below the level, it can slip to 14,010.
Momentum indicators like RSI and MACD turned negative and market breadth deteriorated significantly, further strengthening the view of a short-term bearish outlook.
Abhishek Chinchalkar, CMT Charterholder and Head of Education, FYERS
The decline caused the Nifty to retreat to 14,250. The 14,250-14,280 range is a critical short-term support zone that is worth keeping an eye on.
This is because this zone coincides not only with the recent swing low but also with the 100-day moving average and the lower Ichimoku Cloud support.
A daily close below the lower end of this support zone will likely extend the down move towards 13,900-13,660 in the short term.
Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services Limited
The Nifty50 closed in the red, losing more than 500 points and formed a Bearish Belt-hold candle on the daily scale.
Till the Nifty remains below 14,50, weakness could extend to 14,100 and 14,000, while on the upside, hurdles are seen at 14,650 and 14,800 zones.
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