1 week ago
You know the kind of market you are in when the only bright spot of the day is the fact that the Nifty recovered 50 points from the day's low during the final minutes of the trading session on Wednesday. And there were plenty of day's lows during the session for the Nifty.
The bulls have tried finding a floor to this market but to no avail as of now. A near-300-point drop on Tuesday and a 300-plus-points drop on Wednesday summarises the state of affairs, where every attempted recovery was swiftly sold into. The India VIX too ended 6% higher in what turned out to be an extremely choppy session for the markets.
The fifth straight day of losses for the Nifty has now taken the index below key levels and at one point even slipping below the 200-Day Moving Average of 23,535. Another positive? It closed above that, but only by a whisker.
This five-day losing streak has led to an erosion of ₹20 lakh crore in investor wealth and also sent the Nifty into "correction" territory, meaning a 10% fall from the peak. The Nifty slipped below the 23,650 mark on Wednesday, which was exactly the 10% mark from the 26,277 record high it had made on September 27.
46 out of the 50 Nifty stocks ended lower on Wednesday. The broader markets were no better. 96 out of 100 stocks on the Nifty Midcap index and another 96 out of 100 stocks on the Nifty Smallcap index ended with losses on a day that saw eight stocks declining for every one stock that advanced.
All sectoral indices ended lower in mid-week trading with sectors like Auto, Realty and PSUs having already corrected close to 20% each from their respective peaks. The Nifty Metal index too is down nearly 15% from its peak.
Additionally, 14 Nifty stocks, including RIL, Tata Steel, and Adani Enterprises, have turned negative for the year.
But the day belonged to one stock, and that was Swiggy. It has been delivering food and groceries all along and when it mattered the most, it delivered the gains as well. The stock ended 20% higher on Wednesday, in a market which was falling apart. There are divergent views that have already emerged on Swiggy on the day of its listing. While Macquarie expects a 16% drop from its issue price, JM Financial expects the stock to surge to levels of ₹470. You can read more on that here.
Thursday is the final day of the quarterly earnings season as well as for this truncated week, before the market heads into a long weekend and braces for another truncated week in the wake of the Maharashtra Elections (November 20).
Thursday's trading session will not only be the weekly expiry of the Nifty 50, it will also see earnings reactions from Eicher Motors, Apollo Tyres, Sun TV, Thermax, Vodafone Idea, Shilpa Medicare, Torrent Power that reported results after market hours on Wednesday.
Stocks like Hindustan Aeronautics, Bharat Forge, Hero Motocorp, Delhivery, Glenmark Pharmaceuticals, Bajaj Healthcare, Brainbees Solutions, Crompton Greaves Consumer Electricls, Easy Trip Planners, Honasa Consumer, are some important results to be reported on Thursday.
What do the Nifty50 charts indicate?
The sharp downside momentum continued in the market for the second consecutive sessions on Wednesday and Nifty closed the day lower by 324 points.
Nagaraj Shetti of HDFC Securities said a long bear candle was formed on the daily chart, that has made a new swing low of 23,509 levels. This pattern is reflecting sharp selling momentum in the market.
Shetti said that a negative chart pattern like lower tops and bottoms is intact and the Nifty is currently placed at the lows to form a new lower bottom of the sequence (lower bottom reversal needs to be confirmed with upside bounce).
The crucial lower support of 200-day EMA has been tested around 23,550 levels on Wednesday and there was no significant upside recovery from near the moving average supports for the day. Previously, in last couple of occasions (Oct-23 and June 24), Nifty witnessed significant bottom reversals near the said MA support.
According to Rupak De of LKP Securities, the index has slipped sharply due to strong selling by major players. The Nifty has fallen toward its 200 DMA, breaching the support level at 23800. Immediate support is now at 23500, and a fall below this level could trigger further correction toward 23300–23200. On the higher end, resistance is positioned at 23750.
