Dalal Street Corner: Nifty again slips below key support of 17000; what should investors do on Tuesday?

The benchmark indices such as Sensex tumbled over 900 points from the day’s high level and the Nifty50 gave up key support level of 17000-mark the close.

All sectoral indices closed in the red on NSE, as the Nifty IT slipped most by over 2 per cent: PTI

For the second straight session, the Indian markets extend weakness amid weak global cues and rising cases of the new covid variant — Omicron. The benchmark indices such as Sensex tumbled over 900 points from the day’s high level and the Nifty50 gave up key support level of 17000-mark the close.

Even the broader markets registered weakness as mid and small-cap closed over 1.5 and 1 per lower respectively. And, Nifty Bank witness selling spree in the last hour as it slipped by 1.27 per cent.

All sectoral indices closed in the red on NSE, as the Nifty IT slipped most by over 2 per cent followed by FMCG, Auto and Banks. Similarly, Nifty Realty and Media led the decline in the broader markets.

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Mere 2 shares ended in the green, while 48 closed in the red on the Nifty50. IndusInd Bank tumbled most by around 4 per cent, followed by Bajaj Finserv and Tata Consumer each down between 3-3.5 per cent at the market close today. While only UPL ended with minor gains up 0.53 per cent.

In the IPO segment, Anand Rathi Wealth initial share sale has been oversubscribed over 10 times till around 03:56 pm, aided by strong demand from non-institutional investors, which is booked over 25 times on the final day of the share-sale.

S Ranganathan, Head of Research at LKP securities said, “As the Street awaits the RBI stance on interest rates, Nifty sold off below 17000 as Bears held upper hand with no recovery. FII selling continued despite accumulation seen on Monday in high quality financials by domestic investors.”

“Index breached its psychological 17000 marks and has formed a big bodied Bearish Marubozu candle on daily scale which indicates a complete dominance by bears. Till it remains below 17000, weakness could be seen around 16800-16500 zones whereas hurdles are placed at 17200 and 17350 zones”, Chandan Taparia Vice President | Analyst-Derivatives Motilal Oswal Financial Services said.

Vijay Dhanotiya, Senior Research Analyst at CapitalVia Global Research said, “The market research suggests that 16800 will be an important support level in the market. If it’s unable to sustain 16800 levels, the correction may continue in the market till the level of 16400.”

He added, “Technical indicators suggest a volatile movement in the market. As such we take a cautious stance and advise the traders to refrain from building a fresh buying position, until We see further improvement in the market conditions.”

“If not for the new omicron variant, economic recovery was on a very strong footing but if this virus quickly spreads in India then we might experience some volatility for the coming few weeks unless development is seen on the vaccine side, mentioned Mohit Nigam, Head - PMS, Hem Securities.

“Markets are trading around crucial support zone ~16800-16850 levels and if it does not sustain above this level then volatility likely in the coming days. Immediate support and resistance for Nifty 50 is 16800 and 17250 and for Bank Nifty is 35350 and 36500 respectively,” Nigam added in a note.

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