Recession Fear Wreaks Havoc In Market; Sensex Ends 2,222 Pts Lower
In the Nifty 50 index, merely 4 stocks advance in the positive territory, whereas 46 stocks end in the red territory
The Indian Stock Market witnessed a massive sell-off in the Monday trading session after the fears of recession hit the investors sentiments along with rate hikes from Bank of Japan and geopolitical tension between Iran and Israel.
The National Stock Exchange (NSE) Nifty 50 index ended 2.68 per cent lower at 24,055 whereas the S&P Bombay Stock Exchange (BSE) Sensex settled 2,222 points or 2.74 per cent lower at 78,759 levels on the closing bell.
Nifty Moves
In the Nifty 50 index, merely 4 stocks advanced in the positive territory, whereas 46 stocks ended in the red territory.
Among the winners were Hindustan Unilever with 0.87 per cent gain followed by Nestle India, HDFC Life and Tata Consumer.
However, the laggards suffered a sharp fall led by 7.31 per cent loss in Tata Motors and 6 per cent fall in ONGC. Adani Ports, Tata Steel and Hindalco lost more than 5 per cent, whereas, Power Grid, SBI Bank and Maruti lost more than 4 per cent.
Analysts Note
“Domestic equity indices came under the grip of global markets carnage as a host of external factors like recession fears in the US on the back of weak jobs data, interest rate hike in Japan leading to impact on Yen-carry trade and a raging Middle East conflict triggered massive sell-off across the board. Such corrections in the past were temporary and we saw the market rebounding fast. But we fear that this time it will be quite different from history,” said Prashanth Tapse, Senior VP (Research), Mehta Equities.
Our advice for traders is trading positions should be trimmed or strict stop losses should be observed on either side of trade and option writers should be careful. Investments with a 2 to 3-year horizon can be considered to allocate funds in a phase wise manner. Technically, Nifty closing below 24,000 would be seen as sentimentally negative with support at 23,800 and any move above 24,125 would push the index towards 24,200 and 24,300 levels, added Tapse.
“Historically, the Indian market had showcased a solid track record of outperformance compared to the global market, in the long-term. This trend is expected to stay as GDP growth is forecast to be robust for the decade aided by progressive policies, fiscal prudence, and a favourable political landscape," said Vinod Nair, Head of Research, Geojit Financial Services.
Sectoral Movement
In terms of sectoral performance, Nifty Bank and Financial Services ended 2.45 per cent and 2.58 per cent lower respectively. While PSU Banks plunged more than 4 per cent.
Auto slipped almost 4 per cent, while Metal lost 4.85 per cent. Realty also fell more than 4 per cent, followed by 3.26 per cent dip in IT. Pharma lost 1.46 per cent, while defensive sector FMCG ended 0.32 per cent lower.
The more domestically focussed indices, Mid-cap ended lower with 3.55 per cent loss, whereas Small-cap fell 4.5 per cent.
