Indian stock markets experienced a significant downturn today as investors grappled with multiple factors, including the surging crude oil prices.
The decline was also exacerbated by a strengthening US dollar, adding to the mounting pressure on the markets.
As the closing bell rang, the key indices reported a substantial fall, extending losses from the previous session.
The Sensex plummeted by 752.73 points, closing at 66,844.11, while the Nifty recorded a loss of 222.85 points, concluding at 19,901.40.
At the Nifty, only 10 companies managed to make advances, while 40 witnessed declines.
Among the top gainers on the stock market today were Power Grid, Coal India, ONGC, Asian Paints, and NTPC.
In contrast, notable losers included HDFC Bank, JSW Steel, Reliance, BPCL, and Ultra Cement.
Varun Aggarwal, founder and managing director, of Profit Idea, said, “Nifty went below 20k today on profit booking. Major index stocks HDFC Bank & Reliance Industries. This correction is more on the expected lines. As we expected the market to hit 20,160 and retrace a bit. Nifty can have major put writing at 19,500 levels. As long as 19,517 is intact, investors should not worry”.
“Overall bias is positive, market strength in many mid and small stocks is still quite good. IT and metals stocks are looking attractive on this correction. Deep correction in HDFC Bank has ensured it is getting oversold and the major support area lies around 1534”, said Aggarwal.
Aggarwal said, “Reliance on the other hand is also going in slightly oversold territory. 2337 is a good support area as per the theory of Polarity”
“Both index major stocks are moving in a slightly oversold zone, this implies that Nifty might see a small retracement which is healthy for the market. Nifty bias is bullish with good support levels at 19,698-19,517 levels. Look to accumulate quality stocks on dips”, Aggarwal Added.
The downturn in Indian markets coincided with a broader global trend, as weak overnight US markets set a sombre tone for the day.
The surge in global crude oil prices has also contributed to investor unease, particularly as it poses challenges to various sectors of the economy.
Investors are expected to proceed cautiously throughout the week as they await the outcome of the US Federal Reserve's meeting, which is scheduled to conclude late tonight.
The Fed's decision holds significant implications for global markets, particularly regarding its efforts to combat rising inflation and reach a target of 2 per cent.
In its July meeting, the US central bank increased its benchmark interest rate by 25 basis points, marking the highest level in 22 years at 5.25-5.5 per cent.
The move was part of the Fed's strategy to address soaring inflation and bring it back in line with its target rate. This meeting outcome will be closely watched as the market navigates through ongoing economic challenges.
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