Dalal Street Corner: Investors lose Rs 8.5lakh cr in single day; what should they do on Tuesday?

The Investors lost 8.5 lakh crore in a single day on Monday as domestic equity markets tumbled 3 per cent amid geopolitical tension shrouding Russia and Ukraine among multiple factors. Against Rs 263.89 lakh crore market capitalization of BSE listed companies on Friday, the market cap of these companies on Monday came down to Rs 255.38 lakh crore. 

The Nifty50 gave up 16,900, while the Sensex tanked more than 1700 points as the benchmarks closed at 16,842.80, and 56,405.84 respectively on Monday.  

TCS was the only stock that ended in the green on the two indices, while JSW Steel and Tata Steel declined the most. Other top loser on Monday were HDFC Life, Tata Motors, HDFC ltd, State Bank of India, ICICI Bank, Kotak Bank, Marut, IndusInd Bank, L&T and Wipro were other top losers on Monday.  

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All broader market indices closed in the red as India's Volatility index (Indian VIX) shot up 25.92% in highly volatile market. Nifty small cap and midcap indices declined 4.62% and 4.16%. Among the sectors, Nifty realty and Nifty metal ended with more than 5% loss, while auto, bank and financial services indices too declined by more than 4 per cent.  

Increased tension between the US and Russia over Ukraine sent oil prices rising and forced investors to dump risky assets, said Vinod Nair, Head of Research at Geojit Financial Services. He said risk sentiment was further dampened ahead of the Fed’s emergency meeting which heightened fears of aggressive monetary tightening. "On the domestic front, the annual WPI inflation eased marginally to 12.96% in January from 13.56% in December, but still high, amid moderation in the fuel and power prices," Nair added. 

We have compiled views of market experts explaining how markets fared today (Monday) and what lies ahead for investors and domestic market going forward.  

Chandan Taparia, Vice President, Analyst-Derivatives, Motilal Oswal Financial Services Limited 

"Nifty breached its previous support zones and closed with losses of around 530 points. It formed a Bearish candle on a daily scale and has been forming lower highs - lower lows from the last two sessions. Now till it holds below 17000 zones, bounces can be sold and weakness can be seen towards 16600-16500 whereas hurdles can be seen at 17100 and 17300 zones.  

Santosh Meena, Head of Research, Swastika Investmart Ltd.  

Technically, Nifty is trading near its 200-DMA of 16800, which is a critical support level and if Nifty manages to hold this level, then we can expect a bounce back. Otherwise, further weakness can be expected towards 16450/16000 levels. On the upside, 17100 will act as an immediate hurdle while 17350-17500 is a critical resistance zone. Short-term traders are advised to keep eye on the 16800 level while long-term investors should take the current fall as a buying opportunity because anecdotally any panic due to geopolitical tension creates good buying opportunities. 

Anand James - Chief Market Strategist at Geojit Financial Services. 

Standard deviation studies suggest that a plunge towards16,200 and beyond looms large. Oscillators, however, are yet to signal a directional downside, suggesting that a consolidation awaits us first early in the week, most likely inside the 16960-17400 band. 

Vineet Bagri, Managing Partner- TrustPlutus Wealth   

Today’s market action is mirroring the fall in global markets last Friday and a possible weak opening for USA markets today. Global markets are worried about the fallout of political tensions between Russia and Ukraine, which could lead to major disruptions in global energy supply chains. This development will almost certainly precipitate stiff sanctions by the USA against Russia, which could further dampen sentiment. In addition, it is almost certain that the US-Fed will start raising rates as early as March, with up to 7 rate hikes in 2022. The US-Fed will also stop easing in March 2022, which implies that their balance sheet will start declining from April 2022. This will cause a squeeze in liquidity conditions, in both supply and price. All this has made market participants wary, and they have started closing open positions and cutting leverage, which is causing a selloff in the markets. 

(Disclaimer: The views/suggestions/advice 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.)