Indian market witnessed a volatile session as bears took control of D-Street pushing the S&P BSE Sensex below 60,000 while the Nifty50 failed to hold on to 17,800 levels on a closing basis.

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The S&P BSE Sensex which fell 1032 points in intraday trade to touch a low of 59,045 recovered towards the close of the day suggests that bulls are not ready to give up just yet.

 

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Let’s look at the final tally on D-Street – the S&P BSE Sensex fell 410 points to 59,667 while the Nifty50 was down 106 points at 17,748.

Indian market got off to a shaky start tracking the muted trend in the other Asian markets that fell amid uncertainty around China’s power shortage, rise in crude oil prices, Evergrade crisis, and a rise in US Bond Yields.

Crude oil hit $80 a barrel for the first time in three years, driven by regional economies beginning to reopen from the COVID-19 pandemic and supply concerns, said a Reuters report.

"Following negative global cues and profit booking in IT and realty sectors, the domestic market hit rough weather, however, it witnessed a rebound towards the closing,” Vinod Nair, Head of Research at Geojit Financial Services, said.

“Rise in US bond yield and crude oil price along with the Chinese crisis acted as key headwinds to the ongoing rally in the global market. Amid broad-based selling in the domestic market, public sector, energy and metal stocks traded higher,” he said.

Sectorally, buying was seen in the public sector, utilities, power, and oil & gas while selling pressure was visible in realty, telecom, IT, and banks.

On the broader markets front – the S&P BSE Mid-cap index fell 0.7 per cent, and the S&P BSE Small-cap index was down 0.6 per cent.

At a time when bears took control of D-Street, more than 200 stocks on the BSE hit a fresh 52-week high that include prominent names like IDBI Bank, Finolex Industries, Power Finance, and JSW Energy etc. among others.

Technically, the Nifty50 took support near 17,550 levels and bounced back. Experts are of the view that the immediate support for the index is placed at 17580-17650 while on the higher side 17900-18000 will be an important resistance level.

Investors can look at adding stocks on dips as the consolidation could extend, but the long-term structure still remains intact.  

We spoke to various experts as to what should investors do on Wednesday:

Expert: Santosh Meena, Head of Research, Swastika Investmart Ltd

Immediate support at 17,250| Deploy 100% cash around 16000

The overall trend may remain bullish, but we are going to see the first meaningful correction in the market after a long time where 17250 is immediate support; below this, Nifty is vulnerable to fall towards the 16700 level.

This time correction could be a little deeper but that would be an opportunity to enter the current bull run because this bull run may continue for the next 2-3 years where we may see 5-15% intermediate corrections.

Short-term traders are advised not to hurry to buy the dip however they are advised to be ready with the list of quality stocks where 16700 will be the first level to deploy your 60%-70% cash while 16000 will be the best level to deploy your 100% cash.

Expert: Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited

India VIX moved up by 2.67% from 18.05 to 18.53 levels. A spurt in India VIX is giving a volatile swing and now it must cool down below 15-14 zones to continue the smooth ride of the market.

It formed a Bearish candle on a daily scale with a longer lower shadow indicating declines are being bought.

Now, the Nifty must hold above 17777 zones, for an up move towards 17900 and 18000 zones whereas support is placed at 17650 and 17580 zones.

Expert:  Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd

For day traders, 17800-17750-17720 would be key support levels. On the other hand, 17900-17950-17990 could act as a major resistance level in the short run.

Contra traders can take a long bet between 17750-17720 with a strict 16910 support stop loss.

Expert: Rahul Sharma, Co-Founder Equity99

It is expiry week, and the volatility will surely go on the heavier side, but the sign of recovery gives us a signal that bulls will not easily give up, but the profit booking is taking place on the higher side of the index.

Going ahead, 17700 will act as immediate support for the index followed by 17625 -17550 levels, and on the higher side, 17825 – 17850- 17950 will act as hurdles for Nifty.

Bank Nifty which was outperforming the index for the past few sessions was stable. The support for Nifty Bank is placed at 37650 followed by 37500 -37350 levels & on the Higher side, the 38200 followed 38350 will act as hurdles.

Expert: Mohit Nigam, Head - PMS, Hem Securities

Power stocks were outperformers gaining over 2% as energy demand rises. WTI Crude crosses $76 amid concerns of supply crunch and investors' concern is rising as it may contribute to rise in inflation.

Dow Futures fell amid concerns over rising yield and oil prices. Investors on Dalal Street bought the dips on Tuesday and helped Nifty close above 17,700 levels. Going forward, we believe that Nifty's support shall lie around 17,700 while near-term resistance could be seen at 18,000.

(Disclaimer: The views/suggestions/advices expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)