For the first time in the past one year, the broader Nifty50 slipped below 15,400 as benchmarks ended with more than two per cent cuts on Thursday. This came after the US Federal Reserve increased interest rate hike by 75 points, first time since 1994, in order to arrest surging inflation. With this, the market also extended the weakness for the fifth session, not being able to close on the other side in the green since June 10.
Meanwhile, in the last five sessions, the investors also got poorer by more than 15 lakh crore. The market capitalisation of BSE-listing companies came crashing down to 2,39,19,117.60 crore on June 16 from Rs 2,54,95,563.21 crore on June 9, a loss of 15.7 lakh crore in the past five sessions.
Besides, a whooping 317 stocks hit 52-week lows on the BSE on Thursday.
Earlier, Nifty50 and Sensex settled at 15,360.60 and 51,495.79 respectively after dropping by more than two per cent. Nifty midcap declined 2.3% and samllcap fell by 3.4% as India VIX inched close to 23-mark. Among sectoral indices, Nifty Metal dropped the most by 5.2% as all indices plunged deep in the red.
As the Nifty50 slipped below 15,400 for the first time in the past one year as on June 16, and market hit its 52-week low—Here is what experts make of the today’s session and current trends in the market.
S Ranganathan, Head of Research at LKP securities.
FED effect coupled with a delayed start to the southwest monsoon wreaked havoc as the Nifty caved in below 15400 for the first time in the last one year. As the street prepares for further front-loaded action by central banks in a bid to anchor spiralling inflation, its impact on consumer spending kept investors on the backfoot. A mere glance at the stocks hitting one-year lows today is reflective of the risk-off mood on the street as only a handful of FMCG stocks displayed a green tick among front liners
Vinod Nair, Head of Research at Geojit Financial Services.
The early gains led by an in-line Fed policy was dampened as recessionary fears haunted global sentiments. A cut in growth projection and hints of continuation of aggressive policy in the next meeting instilled chances of a recession in the US economy. In this current scenario, safe sectors will be those that are least impacted by inflation & aggressive policy like Finance & Services. Defensives like Consumption, IT, Pharma & Telecom are worthwhile on a long-term basis.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The Nifty50 opened with a gap up on June 16, only to witness a fresh round of selling at higher levels. It opened right into the hurdle zone of 15800-15900, but failed to cross the upper end of the hurdle i.e. 15900. Thereon, it started sliding down & the selling pressure aggravated as the index breached the March low of 15671 decisively. As a result, Nifty had a sustained selling throughout the day & the selling pressure was visible in the broader market as well. Structurally, the index is set to test 15100-15000 on the downside. On the flip side, 15670-15700 will now pose as a resistance zone for the short term
Santosh Meena, Head of Research, Swastika Investmart Ltd.
Nifty witnessed a breakdown of the key support level of 15700 as FIIs continued with aggressive selling after a sharp interest rate hike by the US Fed whereas it seems there was a lack of support from domestic institutional investors. The market is fearing that inflation is not going to come under control soon whereas a tight monetary policy may cause a recessionary situation.
The near-term structure of the market is weak as the Nifty surrendered 15700 level where 15000 is an immediate and critical support level then 14500 is sacrosanct support.
Indian markets are in a better situation compared to most of the global markets and I believe 15000-14500 is sacrosanct support, where this correction may get arrested, however, recovery won’t be sharp and stock and sector-specific outperformance will be there.
(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.