The BSE Sensex closed below 38,000 at 37,789.13, down by 487.50 points or 1.27 per cent while the Nifty-50 closed at 11,359.45, down by 138.45 points or 1.20 per cent.

For the sixth consecutive session the benchmark indices closed in the red on Wednesday with trade war brewing between US and China and uncertainty around the Lok Sabha elections outcome to be declared after a fortnight on May 23.

The BSE Sensex closed below 38,000 at 37,789.13, down by 487.50 points or 1.27 per cent while the Nifty-50 closed at 11,359.45, down by 138.45 points or 1.20 per cent.

The broader market fared better with Mid-Cap down 0.96 per cent and Small-Cap down 1.21 per cent.

All the sectoral indices on BSE closed in the red, the top losers included Realty (-2.13 per cent), Power (-1.62 per cent), Oil & Gas (-1.36 per cent), Auto (-1.33 per cent) and Bankex (1.10 per cent).

The India VIX, which measures the implied volatility of the Nifty 50 options closed at 26.36 down by 0.42 per cent and hit intra-day high of 27.02.

Weak global cues with major Asian markets benchmarks down by more than 1 per cent led to the Sensex and Nifty opening lower. Sensex opened lower at 38,244.18 by 32 .45 points and moved further down as trade progressed, a recovery in the afternoon was short-lived and the Sensex touched an intra-day low of 37,743.07 as it plunged more than 500 points before a minor recovery before the close.

Among the Sensex stocks only three stocks closed in the green while rest closed in the red. The top Sensex losers included Reliance Industries (-3.35 per cent), Bajaj Finance (-3.22 per cent), Tata Motors (-2.80 per cent), SBI (-2.53 per cent), Vedanta (2.53 per cent), Vedanta (-2.51 per cent), Bajaj Auto (-2.32 per cent), Yes Bank (-2.31 per cent), NTPC (-2.20 per cent).

Other top losers included Zee Entertainment Enterprises which fell close to 12 per cent intra-day and finally closed down by 9.72 per cent as the market responded to pledged share sale rumours. FPIs were net sellers of equities worth Rs 701.50 crore while the domestic institutional investors were net buyers by Rs 232.95 crore, as per provisional stock exchange data.

Technical View

Sahaj Agrawal, Head of Derivatives, Kotak Securities said, "Momentum failure at higher levels has had a significant impact on the broader markets. Breach of intermediate supports for the Nifty at 11,550/11,450 is expected to aggregative short term selling pressure. On the downside 11,000-11,100 is expected to be tested before we witness an aggressive recovery."

Deepak Jasani, Head of Retail Research, HDFC Securities said, "Technically, with the  Nifty breaking the crucial supports of 11,550 yesterday and moving down further today, the short term trend remains down. The Nifty could now head towards the next supports of 11,352-11,311 in the coming sessions."

Market View

Anoop Bhaskar, Head - Equity, IDFC AMC said, "Indian markets had a volatile month as LS elections, crude and global geo-political developments weighed on investor sentiment."

"Election uncertainty has driven markets in the last one year with cyclical segments witnessing a significant de-rating despite posting good results and order books," Bhaskar said.