The NSE Nifty 50 sank 5.9% and the S&P BSE Sensex tumbled 5.7%, posting their steepest decline on an election outcome day since 2004.
The rout comes after the blue-chip indices surged to record highs on Monday as exit polls had projected a much bigger margin of victory.
Here’s how analysts the market pulse:
“Nifty has decisively broken down below the previous swing low of 21,820 which has violated the higher top and higher bottom formation and suggests change in short term trend. Our primary outlook is that Nifty shall now retrace the rise it has witnessed from 18,840 to 23,340 between the period October, 2023 and May, 2024. The crucial support levels to keep handy are 21,100, which is the 200-day moving average and 50% Fibonacci retracement level of the entire up move. A close below this support zone can lead to further decline towards 20,560, which is the 61.82% Fibonacci retracement level. On the upside, 22,310 – 22,550 shall act as an immediate hurdle from a short-term perspective. The range of consolidation is likely to be 21,000 – 22,500,” said Jatin Gedia of Sharekhan.
Tejas Shah of JM Financial & BlinkX, said, “Nifty closed below the crucial support zone of 22,400-500 (50-day EMA) in Tuesday’s trading session which is not a healthy sign. Technically, the evidence continues to suggest that the markets are likely to remain under pressure in the near term. Presently, Nifty is finding support around the 200-day exponential moving average which is currently placed at 21,250 levels. Support for Nifty is now seen at 21,750-800 and 21,250-300 levels. On the higher side, immediate resistance is at 22,300 levels and the next crucial resistance is at 22,500 mark.”That said, here’s a look at what some key indicators are suggesting for Wednesday’s action:US Market
The S&P 500 and the Nasdaq slipped on Tuesday after the latest labor market data compounded worries about growing weakness in the world’s largest economy. Indexes initially pared gains after a Labor Department report showed job openings were down to 8.05 million in April, lower than an expectation of 8.35 million, ahead of the closely watched nonfarm payrolls figures for May, due on Friday.At 10:18 a.m. ET, the Dow Jones Industrial Average was up 74.32 points, or 0.19%, at 38,645.35, the S&P 500 was down 10.99 points, or 0.21%, at 5,272.41, and the Nasdaq Composite was down 57.87 points, or 0.34%, at 16,770.80.
European Shares
European shares slipped on Tuesday as weakness in crude prices dragged energy stocks, while investors refrained from placing huge bets before the European Central Bank’s interest rate decision later this week.
The continent-wide STOXX 600 was down 0.4% by 0810 GMT, snapping a three-day winning streak.
Energy stocks dropped 2% to hit over a two-month low, tracking a 1% fall in oil prices as investors worried about supply ticking up later in the year amid signs of weakening U.S. demand.
Tech View: Long bearish candle
Nifty ended Tuesday’s session 6% lower at 21,884.50 to form a long bearish candle on the daily charts and also ended below short term and medium term averages.
For traders now, 50-day SMA or 22,400/73,500 and 22,500/74,000 would be the key resistance areas while 21,600-21,300/71,000-70,200 would act as key intraday support zones. “We are of the view that the current market texture is extremely volatile and uncertain; hence, it is advisable that traders should remain cautious for next few trading sessions,” Shrikant Chouhan, Head of Equity Research, Kotak Securities said.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Solar Industries, Sobha, Phoenix Mills, and Container Corporation of India, among others.
The MACD is known for signaling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward movement and vice versa.
Stocks signaling weakness ahead
The MACD showed bearish signs on the counters of HG Infra Engineering, Havells India, Bajaj Steel Industries, Vijaya Diagnostics Centre, and MM Forgings among others. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
SBI (Rs 9837 crore), Adani Ports (Rs 6,969 crore), HDFC Bank (Rs 6,736 crore), Adani Enterprises (Rs 6,369 crore), RIL (Rs 5,214 crore), ICICI Bank (Rs 4,784 crore), and L&T (Rs 3,511 crore) were among the most active stocks on NSE in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.
Most active stocks in volume terms
Tata Steel (Shares traded: 12.5 crore), SBI (Shares traded: 12.2 crore), NTPC (Shares traded: 8.4 crore), Power Grid (Shares traded: 7.3 crore), ONGC (Shares traded: 7.2 crore), Adani Ports (Shares traded: 5.2 crore), and Coal India (Shares traded: 4.8 crore) were among the most traded stocks in the session on NSE.
Stocks showing buying interest
Shares of Marico, Britannia, Hero MotoCorp, Blue Star, Emami, Phoenix Mills, and Finolex Industries among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.
Stocks seeing selling pressure
Shares of India Cement, Zee Entertainment Enterprises, Gujarat Fluorochemicals, Bandhan Bank, Dalmia Bharat, and Sterlite Technologies hit their 52-week lows, signaling bearish sentiment on the counters.
Sentiment meter favours bears
Overall, market breadth favoured bears as 3,349 stocks ended in the red, while 488 names settled in the green.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
