Mumbai (Maharashtra) [India]: The stock market faced a significant decline on Thursday, catching investors off guard.
The Sensex and Nifty, opened in the red, displaying a cautious stance following a sudden plunge. Sensex opened 442.72 points down at 70,063.59, while Nifty opened 123.65 points down at 21,026.50.
Amidst the Nifty companies, seven witnessed advances, while 43 faced declines. Power Grid, ONGC, Reliance, Nestle India, and Britannia emerged as the top gainers, whereas Axis Bank, Cipla, Bajaj Auto, LT, and JSW Steel were the top losers.
The downturn follows a substantial sell-off on December 20, where the Sensex plummeted 930.88 points to close at 70,506.31, and the Nifty 50 concluded 302.95 points, or 1.41 per cent, lower at 21,150.15. This marked the most substantial one-day decline for the Nifty in a year.
Varun Aggarwal, founder and managing director, Profit Idea said, "Market uncertainty, fueled by concerns over Covid cases and geopolitical tensions, has prompted analysts to adopt a vigilant stance, searching for potential investment opportunities amid potential corrective declines. Amidst record-setting markets and an overbought status, profit-taking triggered widespread selling across various sectors".
Aggarwal said, "The need for profit booking was evident after the market reached an all-time high, considering technical analysis indicators such as the RSI exceeding 85. A cool-down was deemed necessary for further momentum, and with the holiday season approaching and the financial year closing, Foreign Institutional Investors (FIIs) showed reduced activity".
In the global scenario, US Treasuries maintained gains, while US stocks attempted to recover after new data led traders to assess the likelihood of a soft landing for the world's largest economy.
The Nasdaq Composite fell by 168.85 points, the S&P 500 experienced a drop of 51.50 points, and the Dow Jones Industrial Average declined by 343.76 points.
Aggarwal said, "For the past many weeks, we were suggesting markets are bullish and the target of 21410 is achieved. All rally after that was a bonus for investors. Nifty made a time high of 21593 & fell. The market kept on rising even further only to get stretched on valuations and on technical indicators. Fall was very well expected on Nifty".
Despite the recent downturn, market analysts continue to remain bullish on sectors like IT, Pharma, Petrochemicals, and FMCG.
"We continue to remain bullish on IT, Pharma, Petrochemicals, FMCG sector. For leverage bets, it is advisable to keep trailing stop losses. Healthy correction from these levels is possible and the market might dip. Support for Nifty lies at 20677-20291," he added.
The support for Nifty lies at 20,677-20,291, providing investors with crucial reference points amidst market uncertainties.
—ANI