Nifty 50 hits fresh 52-week low! What technical charts indicate as selloff intensifies

Nifty 50 dropped below 22,200 on Thursday, hitting a fresh 52-week low level of 22,181 as it breached key technical levels amid soaring oil prices, persistent FII selling and other headwinds, with analysts warning of further downturn.

Nifty 50 lost more than 420 points or around 1.9% in the afternoon trading session of Thursday. The index has now tumbled nearly 4,200 points or 16% from its January’s all-time high level of 26,373.

Also read | Why is market crashing today?

What technical charts indicate as Nifty hits 52-week low

SBI Securities feels that the zone of 22,190 - 22,210 will act as a crucial support for Nifty 50 on the downside, while the resistance lies in the zone of 22,500 - 22,520 on the upside. However, if the index falls below 22,190, the brokerage sees the index falling as low as 22,040 before finding the first support.

A breach below that level can push the index towards 22,040. However, if the index manages to rebound and move beyond 22,520, SBI Securities sees it rallying towards 22,670.

What lies ahead for the market?

The RBI’s 25 bps repo rate hike to 5.50%, coupled with the shift to a calibrated tightening stance, signals a meaningful change in the policy cycle, said Ajit Mishra, SVP, Research at Religare Broking. He noted that while the hike itself was largely expected, the change in stance is the more important takeaway, indicating that inflation risks are now taking greater precedence.

Also read |RBI hikes rate, but analysts see shift to ‘calibrated tightening’ as bigger takeaway. How can this impact markets?

“We expect the near-term market impact to remain selective, with rate-sensitive pockets facing pressure, while banks with stronger balance sheets and liability franchises should remain relatively better placed,” the analyst said.

Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, meanwhile expects market trajectories to continue to be governed by Q2 earnings execution and corporate cash flows rather than this telegraphed monetary adjustment.

Also read | RBI rate hike done. Now what’s ahead for bank stocks? Jefferies, other analysts weigh in

Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.