Indices witnessed a highly volatile session on Thursday.
Indian equity markets continued their downward slide amid the rising number of coronavirus cases in India as well as globally. The S&P benchmark BSE Sensex ended below 28,300 after losing 581 points. The broader Nifty lost over 200 points and plunged below 8,300-mark.
This comes as global markets have been in free fall in the wake of coronavirus pandemic. While the number of cases rose to 173 in India, including 4 death, the number of global COVID-19 cases crossed 200,000-mark on Thursday, claiming over 9,000 lives.
Indices witnessed a highly volatile session, wherein the Nifty declined as much as 636 points (7.5%) to 7,833 during the early trade but later made a sharp recovery by turning positive. However, it again swung back in the negative territory in the last hour of trade with Nifty ending 2.4% (205 points) lower to 8,263, while the Sensex fell 5.6% (or 581 points) to 28,288.
All the sectors ended in red with Auto, Metals and Media being the biggest losers, down 5-6%. India's volatility index jumped 12.5% further to 72 levels, its highest in over a decade. The rupee also hit a fresh record low of 75.01 against the dollar. Gold and commodities continue to fall as investors and businesses scramble for hard cash.
Given the coronavirus pandemic concerns, the SEBI has given relaxation to the companies by extending the deadline for filing quarterly results by a month along with other relaxations. So far, many of the measures have been announced by policymakers and the government across the globe to support the economy. However, it has not been successful in curtailing the continuous sell-off seen in the global markets. Even FIIs have been on a selling spree, having sold Rs 55,000 crore worth of equities in less than a month.
"With rising cases of coronavirus, volatility is likely to continue in coming days and any bounce could be sold into. In such times, traders should refrain taking long positions as all the global markets are in strong bear grip. Long term investors with good quality stocks should hold on to their portfolios and see through the current storm. Those investors who are sitting on cash can start accumulating few high-quality names in a staggered manner," Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd said.
"Technically, there is no sign of reversal and we may see Nifty continue to fall towards 7,900 and then 7,500 levels. On the higher side, resistance is shifting lower to 8600 and then 9,200 zone. Till the time Nifty doesn't close above 8600 levels, bears will have upper hand and bounces shall be used as shorting opportunity," he added.
Indian markets seesawed based on the up and down moves in the Dow Futures even as the Asian markets closed deep in the red and European markets giving up some early gains made after the European Central Bank surprised markets by unveiling a major asset-purchase program to combat the financial difficulties caused by the coronavirus outbreak, experts said.
"A recovery from the lows helped to curb the losses to a certain extent. It was nevertheless the fourth consecutive negative daily closing for the Nifty," Deepak Jasani, Head Retail Research, HDFC Securities said.
"Technically, with the Nifty correcting sharply, the short term trend remains down. The Nifty could now test the next supports of 7,835 in the near term. Any pullback rallies could find resistance at 8,575," he added.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities said the Nifty had collapsed initially but it recovered quickly from the levels of 7830/7890.
The levels of 7,900 and 7,800 have a special significance, he said, adding that on the day of currency demonetization, the Nifty saw a level of 7,890.
"At that time the market was unpredictable and today also, when it fell it was unpredictable but the market has managed to survive and rebound strongly. Technically, till the market is above the levels of 7,800, we can expect a gradual recovery towards 8,800 levels. Below the level of 7,800, we could see the levels of 7,500 or 7,300," he added.
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