Sensex, Nifty fall a percent each; mid, smallcap indices down 2%; 5 factors behind the selloff
There was no pause for the Indian equity market on July 20, with a strong familiar wave cross-sector attractive sensex and nifty flagship indexes lower by percent.
The market opened lower, expanded the previous session losses, amid weak global cues. Sensex and Nifty both fell around percent in morning trade, while mid and smallcaps suffered more.
At 1130 hours, BSE Sensex was 457 points, or 0.87 percent, down at 52,096, while the good at 15,603, fell 149 points or 0.95 percent.
The BSE MIDCAP and Scatcap index fell 1.91 and 2.31 percent each.
Almost all sectoral indices are in red, with BSE realty, strength, metal, industry, telecommunications, utilities and capital goods, down by 2 percent.
Here are 5 factors that keep the market under pressure:
1. Weak global cues: The surge in Delta variant infection triggered a wide selling action on Wall Street in the previous day for fear of the updated Covid-19 shutdown and the protracted economic recovery.
The three major US stock indices ended the lower sharp session, with S & P and Nasdaq who suffered the biggest percentage of the percentage of the day since mid-May.
Stocks in Asia-Pacific fell on July 20 trading after falling overnight on Wall Street who saw the average Dow Jones industry understated more than 700 points.
2 Concerns Assessment: Experts say investors seem to worry about rich market assessments and a negative news piece is triggering orders for profits on the market.
“725 points cut in Dow yesterday, the worst in 2021, is a reflection of risk-off on the market globally. The fact is that at a high assessment when investors sit on a large profit, every fear can trigger ordering and earnings correction,” Vijayakumar said, the head of investment strategist at Geojit Financial Services.
“This correction is good for the market. In the absence of correction, excessive judgments will make an unavoidable accident very severe and painful. Large correction is not possible in India because we have corrected a little of the recent record recently.”
3 FPI sales without stopping: foreign portfolio investors (FPIS) have sold equity in July. In accordance with data available with NSDL, FPI has sold Indian equity worth Rs 4,938 Crore in July so far. They have invested some money in the debt segment so cleaning, they have issued an 1,243 crore RS from the Indian financial market in July so far.
4 Macro Factors: Increased inflation and anticipation of lower economic growth than estimates weighed on investor sentiment. While inflation can force the central bank to tap the exercise of their stimulus, slow economic growth can stab the bull market sentiment.
5 Technical: Nifty formed the Doji Candlestick in the previous session and confirmed the pattern of candlestick Man hanging, which showed negative movements.
In addition, the index closes below 21-DMA, which further adds to the weakness to the counter. MACD hourly momentum indicators also show negative crossover, which show weakness, Sumeet Bagadia, executive director at Choice Broking, said.
In accordance with Manish Hathiramani, proprietary index traders and technical analysts, Deen Dayal investment, Nifty threatens the level of 15,600 and is not too far from the important support zone.
“What needs to be monitored is, whether we receive support and rise again to continue the current uptrend and return to 15,900-16,000 or we solve this level on the basis of closure and the next target might be 15,400. Traders are advised to defend attention and maintain a stop Strictly in their trade, “he said.
