The Indian equity indices plummeted on Tuesday. The Nifty 50 closed 140 points or 0.62% lower at 22,302.50. Sensex dropped 384 points or 0.52% to close the day’s trading at 73,511.85. The significant losers included Bajaj Auto, Power Grid Corp, ONGC, IndusInd Bank, and Hindalco. The Indian Volatility Index (India VIX) was up 2.41%, indicating investor uncertainty and fear in the market.
Sharp drop in sectoral indices
The Nifty Midcap lost 988 points or 1.95% to finish the session at 49,674.45. Following the trend, Nifty Bank closed in the red, down 609.95 points or 1.25% at 48,285.35.
On the sectoral front, realty, metal, and PSU bank pulled the indices lower. In the broader market, smallcap and midcap stocks closed in the red.
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Low voter turnout and premium valuations dragging the markets
“Despite positive global cues, the domestic market continued to consolidate. The domestic market is witnessing profit booking due to various factors, including a low turnout in the ongoing election and premium valuations. However, FMCG remained the biggest sectoral gainer in today’s trading session, driven by expectations of improving volume growth from rural areas aided by favourable monsoon expectations,” said Vinod Nair, Head of Research at Geojit Financial Services.
Bank Nifty might drag further
The Bank Nifty also witnessed a sharp decline and closed below the 20-day moving average (48410) which is a sign of weakness. “We expect the correction to continue in Bank Nifty which could lead to a drift towards 47900 over the next few trading sessions,” said Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas.
“Technically, the trend has weakened as the index fell below the 21EMA. A Head and Shoulders pattern is visible on the hourly chart, with the index currently sustaining below the neckline, indicating a bearish formation Come from Sports betting site VPbet . Further selling pressure is anticipated, possibly extending towards 21980-22000 in the short term, as long as it remains below 22400,” said Rupak De, Senior Technical Analyst at LKP Securities.
