Sensex falls 200 points, Nifty below 23,100 as market bleeds for 7th session. What lies ahead?

The Indian stock market continued to bleed on Wednesday, with Nifty extending losses for the seventh consecutive session as oil prices inched higher after Trump claimed the US is not engaged in any peace talks with Iran.

Sensex dorpped over 200 points to test 77,000 level, while Nifty 50 dropped over 50 points to slip below 24,100 level. Broader markets also continued to record losses, with Nifty Midcap 100 and Nifty Smallcap 100 indices opening in the red.

Bajaj Finserv and Bajaj Finance shares dropped more than 1% each to lead losses on Sensex, while Tata Steel, M&M, L&T and Asian Paints shares fell nearly 1% each. Bucking the trend, IT stocks including HCL Tech and Infosys shares gained over 1% each.


Among the sectors, Nifty IT jumped more than 1% while Nifty Metal lost half a percent. This came as India VIX, which measures volatility in the market, jumped nearly 2% to 11.60. The overall market breadth remained negative, with NSE seeing 1,432 declines against 1,111 advances, while 150 stocks remained unchanged.

What lies ahead for Dalal Street?

The ongoing mild weakness in the market is driven mainly by two factors - one, the rising crude prices, and two, appreciating bond yields globally, VK Vijayakumar, Chief Investment Strategist at Geojit Investments noted. He highlighted that crude prices have been responding to news from the Middle East for many months since the start of the war. Now, there is total uncertainty about the outcome of this conflict. Crude prices are rising anticipating the continuation of the uncertainty.

Meanwhile, fears of rising inflation are pushing bond yields higher. The US 30-year yields are at their highest levels since 2007. This is not a favourable setting for the equity market, Vijayakumar pointed out. Bond yields are rising in Japan and Germany, too. Yet, the Indian market has not corrected sharply since the fundamentals are strong and getting stronger, he said, adding that the prospects for GDP growth and earnings growth for FY27 are improving, and this along with abundant domestic liquidity is keeping the market resilient.

“Long-term investors can use the ongoing weakness in the market to accumulate quality growth stocks. Even though the valuations are higher, the market momentum is in mid- and small-caps,” according to the analyst.

Technical view on Nifty

While consecutive days of declines have raised the odds for a mean reversion upmove for Nifty, deeper supports at 24,060 and 23,575 stands are exposed now, explained Anand James, Chief Market Strategist at Geojit Investments

“We will look for a pull back above 24,260 to play upsides aiming 24,350 or 24,540-24,666,” he said, explaining the key technical levels to watch out for.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)