Mkt May Further Fall

Mumbai: On Tuesday, the benchmark indices corrected sharply, with BSE Sensex was down by 1,258 points. Among the sectors, all major sectoral indices witnessed a profit booking at higher levels, with the PSU Banks and Capital Market indices lost the most, shedding over 3.5 per cent.

Technically, after a weak opening, the market slipped below the 200-day SMA (Simple Moving Average) of 78,600, and post-breakdown selling pressure intensified. Additionally, on the daily charts, the index has formed a long bearish candle, which supports the potential for further weakness from the current levels.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “We believe that the current market texture is weak, but oversold. Therefore, level-based trading would be the ideal strategy for day traders. For day traders, as long as the market is trading below 78,200, weak sentiment is likely to continue. Below this level, it could retest the 77,600 mark.” Further downside may also occur, potentially dragging the index down to 77,300. Conversely, if it rises above 78,200, the market could bounce back to the 78,600-78,800 range.

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “There are already concerns that the forthcoming third quarter earnings could be muted for several sectors due to weak government spending and subdued demand, which is pushing investors, especially the FIIs, to further slash their domestic equity bets.”

Also, the focus will be on next month’s Union Budget announcement and what will be the government’s action plan to boost demand and measures to overcome global challenges. Vaibhav Vidwani, Research Analyst, Bonanza, said: “The Indian stock market faced a significant downturn, with the BSE Sensex plunging by 1,258 points (1.59 per cent) to close at 77,964 6. This marked one of the steepest single-day declines in recent months. The sell-off was largely attributed to continued foreign institutional investor (FII) outflows and confirmation of HMPV cases in India coincided with reports of a virus outbreak in China, leading to heightened investor caution.”

Banking stocks were notably affected, with HDFC Bank and ICICI Bank, concerns over slower loan growth emerged. Investor sentiment remains cautious ahead of upcoming Q3 earnings reports and macroeconomic indicators set to be released soon.