After The Bell: Investors lose Rs 4 lakh crore; here is what they should do on Friday

Indian markets fell for the sixth consecutive day on the September expiry day on Thursday. Both the Sensex and the Nifty lost more than 6 percent each in the September series.

The bears remained in control of the September series and pushed the benchmark indices lower. The S&P BSE Sensex broke the crucial support of 37,000 while the Nifty50 closed below 10,900.

Investors lost nearly Rs 4 lakh crore in terms of market capitalisation on the BSE. The average market capitalisation of the BSE-led companies fell from Rs 152.71 lakh cr recorded on 23 September to Rs 148.79 lakh cr on September 24.

The S&P BSE Sensex ended 1,114 points lower at 36,553 while the Nifty50 fell 326 points to close at 10,805.

Sectorally, selling pressure was visible in IT, auto, metals, banks and public sector space.

Experts advise investors to stay light on positions as the index is trading near crucial support levels, so a technical bounce could be in the offing. Investors can use dips to buy their favourite stocks.

“The looming uncertainty over the stimulus package in the US, combined with the issue of rising COVID cases worldwide, has raised concerns over the economic recovery. And, it may deteriorate further if the virus situation results in partial lockdown,” Ajit Mishra, VP-Research, Religare Broking Ltd told Moneycontrol.

“Amid all, the Nifty is down by nearly 6 percent this week so far and tested the crucial level of 10,800, too. However there’s no sign of respite from the banking index,” he said.

It would be prudent of traders to wait for clarity before jumping into a trade while investors should keep their shopping list handy to accumulate fundamentally sound stocks on dips, he said.

We have collated views of various experts on what investors should do on September 25. 

Mohit Ralhan, Managing Partner & CIO, TIW Private Equity

After a significant upside move over the last few months, the market is showing signs of nervousness on account of global cues.

It is factoring in uncertainty and risks on account of the global growth recovery and delays in an effective COVID vaccine. The market may also look to recalibrate after companies come out with the September quarter results.

Manav Chopra, CMT,  Independent Technical Strategist

The Nifty breached the crucial support of 10,900 decisively with a bearish market breadth. DXY has witnessed a breakout from the Bullish head & Shoulder pattern and is likely to test levels of 95.2-95.8.

This has recently added fuel to the recent sell-off in emerging markets and commodities. The USD-INR spot has also exceeded the resistance of 93.8, which indicates further weakness towards 94.3-94.5. This is likely to add to selling pressure in financials and NBFCs in the coming sessions.

We expect underperformance from financial, commodities and infra sectors. The next lower support level for the Nifty is at 10,550-10,450 and the Bank Nifty's at around the 20,100-19,800.

Mazhar Mohammad, Chief Strategist–Technical Research & Trading Advisory, Chartviewindia.in

In the Nifty breaches 10,750 on a closing basis, then the weakness shall get extended to 10,650, which is 38.2 percent retracement value of the entire rally from the lows of 8,806 registered on May 18.

Hence, on stability in the next one or two trading sessions, the index can make a pullback attempt towards 11,000.

Unless it closes above the day's bearish gap zone of 11,015–11,024, the index is unlikely to stabilise. Considering the volatility, traders should remain neutral on the index.

Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited

If the index sustains below 11,000, then any small bounce could be sold for further weakness towards 10,650-10,600 while on the upside, the medium-term hurdle is shifting lower to 11,111-11,250.

Since it is the beginning of a new series, the options data is scattered at various strikes. Maximum Put OI is at 10,500 followed by 10,000 strike, while maximum Call OI is at 11,500 followed by 12,000 strike.

If the Nifty Bank trades below 21,000, then the weakness can continue towards the psychologically important 20,000 zones while the medium-term hurdle exists at 21,250-21,500 zones.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.