Nifty had a gap down opening and plunged more than 300 points for a second consecutive session as bears held tight control over bull tracking southward journey in global counterparts amid rising recession fears in the western countries. Consistent FII selling and weakening currencies with the strengthening dollar also dampened equity market sentiment.
The index has seen the formation of a bearish candlestick pattern on the daily charts. Index has defended the 17,000 mark due to a bit of recovery in late trade, hence if the index manages to sustain the same crucial mark then there could be a temporary relief rally in the market after being looked oversold, but if the index fails to hold 17000 level, then there could be a fair chance of index breaking 16,900-16,800 levels in coming days.
All sectors, barring IT, traded in the negative territory. Auto, Metal, Realty and Oil & Gas were the biggest losers, falling between 3 percent and 4 percent.
The Nifty hit a day's low of 16,978, though it attempted some recovery. The index finally settled with 311 points at 17,016, continuing the downtrend for the fourth consecutive day.
"Due to heavy fall seen today, there is a chance to recover and a relief rally may come to trap bears
200-day simple moving average (SMA - 16,992) and 16,850 would be a key support level. On the flip side 17,150 and 17,200 could be the immediate hurdle for the bulls.... The India VIX, which measures the expected volatility in the market, rose to 21.89 levels which is very dangerous for mkt.
On the Option front, we have seen maximum Call open interest at 18,000 strike followed by 17,500 strike , while the maximum Put open interest was seen at 16,000 strike followed by 17,000 & 16,500 strikes.
Option data indicated that the Nifty may remain in a range of 16,800 to 17,500 in the near term.
Bank nifty also corrected sharply, opening more than 500 points lower at 39,028 and corrected up to 38,492. The banking index defended the 38,500 level and closed with 930 points losses at 38,616 and formed a bearish candle on the daily charts, with lower high and lower low formation.
Finance nifty also lost it's luster followed by bnf fall. 38000 - 40000 would be a zone for bank nifty.
The higher-end resistance is visible at the 39,500-40,000 zone and the next support is seen at the 38,000 level, he added.
There was no significant rise during the session, but all participants were in a mood to sell off. Fear of world recession is a major hurdle on bull path.
World recession is being shaped in a cat walk. Interest rate hike by all central banks leads to recession and it also necessary to curb inflation which is global issue. Our market can't go against global trend, that one should understand. Our economy is also linked with global, so sooner or later impect has to pinch our fingers too.
Buy in dip a good strategy during this fall. The fall can be 5 - 10 % from latest high.. Investors should not be panic. Keep silent and have patience.. Mkt has to touch new high, only time factor matters.
Signing off for the day with good luck.. 💐