Market hits panic low, may pull back

The market continued to come under selling pressure with Sensex and Nifty falling nearly 2 per cent intra-day on rumours of more debt distress, muted auto sales and weak macro data.

The Sensex plunged 737 points intra-day to 37929.89, while Nifty fell 226 points to 11247.

But indices recouped losses with the Sensex ending the day at 38305.41, down 362 points or 0.94 per cent, while Nifty closed at 11365.70, down 109 points or 0.95 per cent.

Big losers were banking stocks led by Yes Bank down over 22 per cent after its promoter entities sold a part of their stake in the company.

Advance vs decline ratio also stood at 1:3 for the second consecutive day.

Amongst the broader market indices, both ‘BSE Mid-Cap and BSE Small-Cap’ ended lower by 1.5 per cent and 1.6 per cent respectively. All the sectoral indices witnessed selling pressure led by Realty, Banks, IT and Metals which fell in the range of 1.6 to 3.9 per cent.

Technical View

“Technically, we feel that the markets have experienced selling climax day and registered panic low at 11247. Till the market is above 11247 on Nifty and 37930 on Sensex, there would be ample of chances for the market to pull recent losses by hitting the level of 11500/11550.  Strategy should be to take positional trade in top ten companies of Nifty-50,” said Shrikant S. Chouhan, Senior Vice-President, Equity Technical Research, Kotak Securities.

Market View

“Contraction in core sector and concern on Govt’s plan to stick with original fiscal target of 3.3 per cent in spite of huge cut in tax raised concern over spending. Investors are not expecting a meaningful recovery in festival season due to continued weakness in auto sales. Volatility in banks and fall in rupee also influenced profit booking tendency in the market,” Vinod Nair, Head of Research, Geojit Financial Services.