Further Fall More Likely

Mumbai: On Monday, the benchmark indices corrected sharply, with BSE Sensex down by 1,054 points. Among the sectors, all major sectoral indices traded in the red, with the Realty index losing the most, shedding over 6.5 per cent.

Technically, after a weak opening, the market breached the crucial support level of 77,000, which is largely negative. It also formed a bearish candle on daily charts and is holding a lower top formation on intraday charts, indicating further weakness from current levels. Shrikant Chouhan, head (equity research), Kotak Securities, said: “For day traders, 77,000 would act as a trend decider level; below this, weak sentiment is likely to continue. If it falls below this level, the market could slip to 76,000-75,700. On the flip side if we move above 77,000, the pullback could extend to 77,300-77,500.”

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “US imposing sanctions on Russian oil exports pushed the rupee to a fresh low against the dollar, which in turn triggered massive correction in domestic equity markets as overseas investors continued to desert the local share market.”

Wide-spread selling across the sectors fuelled along with massive exits in mid and small-cap stocks further worsened the sentiment. Rising crude oil prices would raise concerns of a spike in domestic inflation, which could further delay any rate cut hopes from the RBI in the near to medium term

Vaibhav Vidwani, research analyst, Bonanza, said: “Domestic experienced significant turmoil, with the BSE Sensex plunging by 1,048 points (1.36%) to close at 76,330, while this decline marks a continuation of a downward trend, with both indices down approximately 11% from their September 2024 peaks. Several factors contributed to this market crash, profit booking by foreign investors, weak capital expenditure from the government, and rising food inflation as primary drivers of the sell-off.” Additionally, concerns about U.S. economic data, particularly a robust jobs report that diminished expectations for Federal Reserve rate cuts in 2025, have heightened market volatility. The rupee also hit a lifetime low against the dollar, further exacerbating investor anxiety. Attention now turns to upcoming economic indicators and the Union Budget for potential market stabilization.

STOCK PICKS

Piramal Pharma| TRADE-BUY | CMP : Rs232 | SL : Rs220 | TARGET:Rs250

Piramal Pharma is trading with bullish momentum, supported by a key level at Rs220 and resistance near Rs250. The RSI indicates strengthening momentum, and a breakout above Rs250 could signal further upside. Buy at Rs232 with a stop loss at Rs220, targeting Rs250. Sustained buying near support levels enhances the positive outlook.

BEL (Bharat Electronics Ltd)| TRADE-BUY | CMP : Rs259 | SL : Rs250 | TARGET : Rs270

BEL is consolidating near support at Rs250, with resistance at Rs270. The RSI reflects a strong bullish bias, and the stock is approaching a breakout zone at Rs270. Buy at Rs258 with a stop loss at Rs250, targeting Rs270. Strong volumes confirm buying interest, making it a favorable setup.

(Source: Riyank Arora, technical analyst at Mehta Equities)