Sensex, Nifty in 'crucial' zone after today's big fall, say analysts

Sensex fell over 850 points (Bloomberg)
Sensex fell over 850 points (Bloomberg)
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 2 min read . Updated: 05 Apr 2021, 05:15 PM IST Staff Writer

Indian stock markets fell sharply today as a record jump in new coronavirus cases spooked investors. The Sensex fell down 870 to finish at 49,159 after tumbling as much as 1450 points earlier in the day. The broader NSE Nifty sank 1.5% to settle at 14,637, after trading in a range of 14,849 to 14,459 during the day. The broader markets too were not spared as both BSE Midcap and Smallcap indices ended with losses of nearly 1% each.

Bajaj Finance was the biggest loser among the Sensex pack, falling nearly 6%. IndusInd Bank, SBI, M&M, Axis Bank, Bajaj Auto and ICICI Bank fell between 3.5% and 5.5%.

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"Nifty broke the level of 14500 on an intra-day basis but the Nifty was quick to recover from there and has closed above that support level. We are now in the crucial territory. If we disrespect today's low, we can fall further to 14250. On the upside, until we do not conquer 14950 we will not be in a bullish market and the index will continue to remain sideways with a bias on the downside," said Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments

Investors await the outcome of the central bank's monetary policy committee meeting on Wednesday.

"The market witnessed a huge sell-off today as India’s second wave of Covid-19 is getting bigger than anticipated and is expected to ruin the pace of economic recovery. High valuation added further concern due to a possible downgrade in Q1FY22 earnings. A policy decision in the upcoming MPC announcement and Q4 earnings will define the market volatility in the coming days," said Vinod Nair, Head of Research at Geojit Financial Services.

Total coronavirus cases in India jumped by more than 1 lakh today, the highest ever. Maharashtra state, home to the financial capital of Mumbai, imposed stringent curbs including a complete lockdown on weekends.

"The sharp surge in COVID-19 cases has dented investor sentiments and has increased fear of harsh restrictions which would impact economic activity. Going forward, government actions to curb the surge would be one of the important factors to watch out for investors. Further, the upcoming RBI monetary policy would be actively tracked by investors. We expect the RBI to maintain its dovish stance and leave key rates to be unchanged," said Ajit Mishra, VP - Research, Religare Broking Ltd.

Deepak Jasani, Head of Retail Research, HDFC Securities, said, "Volumes on the NSE were in line with recent averages as Nifty fell with volumes. Today, Nifty filled the upgap made on March 30 in the morning weakness. Severely adverse advance decline ratio suggests broad nervousness in the markets. Nifty could remain in 14471-14814 band for the next few days with downward bias."

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