Dalal Street Corner: Last-hour heavy selling pressure forces a fifth straight loss for BSE Sensex, Nifty50; what should investors do on Wednesday?

Amid high volatility, the domestic markets cracked for the fifth straight session on Tuesday. Both the benchmark indices Sensex and Nifty50 dropped around 1.2 per cent at the market closing time. While the broader mid and small cap markets did even worse to end 1.5 per cent below the last closing levels.  

Of 50 scrips on Nifty, mere 6 stocks advanced and 44 declined. HDFC twins – HDFC Bank and HDFC were among the top losers and continued to create weakness in the market for the second day. The former tumbled by over 6 per cent and the latter by over 4 per cent at the market close. 

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Life Insurance stocks - HDFC Life and SBI Life also joined the downward rally, slipping between 5.5 and 4.5 per cent, respectively at the market. On the contrary, Apollo Hospitals surged over 5 per cent as a top gainer, followed by Coal India and Reliance Industries, which were up over 3 per cent at the close. 

On the sectoral front, all indices closed in the red with IT, FMCG, and realty witnessing maximum selling pressure, followed by financial services and media and metals at the market close.  

Nifty Put-Call ratio fell to 0.76 level whereas FIIs' (Foreign Institutional Investors) long exposure in index future has also slipped to 45 per cent and both are in oversold territory therefore short covering could be one hope for the bulls. 

"Intensification of geo-political tension and hyperinflation as crude and metal price rises worried the market. The IT sector continued to lead the downtrend following sectorial headwinds highlighted in weak Q4 results. Quick sell-off was witnessed during the closing hours led by bank stocks due to FII selling as the global market weakened,” Vinod Nair, Research Head at Geojit Financial Services said. 

We have collated views from different experts as to what investors should do when trading resumes: 

Expert: Parth Nyati, Founder - Tradingo 

Bears attacked the market, especially in the last hour. The market remained resilient throughout the day but then there was a sudden sell-off in the last hour and we can say that there could be large FIIs selling post 2:30 PM.  

Apart from FIIs selling, rising energy prices, geopolitical concerns, and rising US bond yields are key concerns for the market. 

Technically, the Nifty has slipped below its important moving averages and psychological level of 17000 however 16900-16800 is another critical support zone that the bulls need to defend otherwise we can expect more pain in the coming days. On the upside, 17150-17300 will act as an immediate supply zone while 20-DMA of 17500 is a key hurdle. 

Expert: Ajit Mishra, VP - Research, Religare Broking Ltd. 

Despite mixed global cues, the benchmark opened positive and thereafter traded in a range for most part of the session. However, in the last hour, the market witnessed a sharp fall as geopolitical tension between Russia-Ukraine intensified which led to profit booking. 

We reiterate our cautious stance on the market as global cues remain unsupportive. Also, the weak start of Q4 earnings on the domestic front remains a concern for participants. In the meantime, investors would continue to track updates regarding Russia-Ukraine and currency movement. Investors are suggested to be very selective in picking stocks. 

Expert: Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas 

The Nifty started the session on a positive note on April 19 however couldn’t build upon the early gains. Despite of multiple attempts during the day, the index failed to cross the 20 HMA as well as the 40 DEMA. These moving averages induced the bears into action thus resulting in a sharp fall towards the end of the session.  

Consequently, the Nifty has breached the 200 DMA & the level of 17000 on a closing basis. The overall structure suggests that the selling pressure can continue going ahead. Thus the index is expected to tumble further towards 16500-16400 in the short term. On the flip side, today’s high of 17275 will now act as a crucial short-term barrier.