Sensex and Nifty slipped to their 10-month lows on Monday, in line with weak global markets which were impacted by the ongoing Russia-Ukraine tensions.
Sensex tanked 1,747 points to 56,405 and Nifty slipped 531 points to 16,842. India VIX, the market’s volatility index zoomed 22.97% to 22.97, signaling heightened volatility across the stock market.
On Monday, the Indian equity market started the day with a gap down amid the weakening in global markets. A strong sell-off was seen across the bourses, wherein the broader indices nosedived in the early trade and Nifty breached the psychological support of 17000 mark.
Gradually the selling aggravated, and the index plunged further to make a new low for the calendar year. Eventually, the benchmark index settled in red a tad below 16850 with a massive cut of over 3 percent.
Technically, no mercy was given to some of the key intermediate supports, and the throughout selling pressure has turned all the indicators on the bearish front. At present, the index is hovering just above the 200 SMA, any breach below the same could be seen as a sign of cautiousness. Although yesterday’s sell-off was unexpected for us, we must accept the fact that charts look distorted, and hence, the possibility of extended correction is very much on cards.
As far as levels are concerned, below 16800 there is no major support visible before December month low 16400, while on the flip side, the unfilled gap around 17100-17300 should serve as the potential resistance for the bulls. Even the volatility index India VIX has spiked up by 23 percent, indicating a rise in uncertainty in the market.
Considering yesterday’s breakdown we would have been convinced of further pain in the coming days. But since this has to do with geopolitical concerns and such issues are very sensitive as well as deceptive at times, we would take one step at a time. Hence, it is advisable to stay cautious and avoid aggressive bets until the global uncertainty comes to a halt.
