Sensex, Nifty erase gains to plunge over 1% each. What’s triggering the fall?
Benchmark indices Sensex and Nifty declined on Monday, giving up early gains, on the back of mixed global cues as investors remain watchful on the fallout of Silicon Valley Bank and its impact on domestic markets while also awaiting for inflation data due later in the day. Sensex fell more than 750 points to 58,358 whereas Nifty 50 more than a per cent to 17,197 in the afternoon deals, breaking below 17,200 mark for the first time since October 17. Nifty Bank tanked about 2% whereas the midcap index slip over a per cent.
IndusInd Bank, Tata Motors, Mahindra and Mahindra (M&M), Infosys, State Bank of India (SBI), Axis Bank were among the top laggards, dragging the indices down whereas Tech Mahindra jumped over 10% after naming Mohit Joshi as the new chief executive officer.
US stocks ended sharply lower on Friday as investors parsed mixed signals from the February jobs report amid ongoing concerns about contagion in the banking sector from the troubles at Silicon Valley Bank. European markets plunged over 1% after HSBC announced acquisition of SVB UK.
Nifty outlook
“As Nifty struggles to stop the slide that now aims atleast 17255-17050, a pull back above 17420 could signal that Nifty is in the mood to shrug off bearish vibes. And, once 17520 is cleared, 17800-18200 will be back in the radar. Alternatively, inability to float above 17420-520 band will attract rejection trades, which would have the potential for an expansive plunge towards 16500-200. While this is a possibility, we will go in this week not expecting an outright collapse,” said Anand James – Chief Market Strategist at Geojit Financial Services.
“Nifty fell on Friday as expected with a gap down but did not close at the intra day low. On weekly charts Nifty ended 1.03% lower after a positive week. Upgap support of 17328 has been repeatedly tested. A couple of more testings could result in that support being breached. 17573-17672 could be tough to breach for the Nifty in the near term. Key data points to watch out for in the coming week include India CPI on Monday, US CPI on Tuesday and US retail sales on Wednesday. These could influence the expectations on interest rate trajectory and risk appetite of investors,” said Deepak Jasani, Head of Retail Research, HDFC Securities.
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