Nifty breaches 14,300, Bank Nifty crashes 5%. Key levels to watch now

Sensex fell over 1800 points while Nifty was down 3.5% (PTI)Premium
Sensex fell over 1800 points while Nifty was down 3.5% (PTI)
 2 min read . Updated: 12 Apr 2021, 01:55 PM IST Staff Writer

India's stock markets crashed today as record rise in covid cases led to fears of more restrictions on economic activity. The Sensex slumped over 1800 points while Nifty fell below 14,300. On the other hand, the Indian rupee dropped past 75 to a dollar for the first time since August 2020. The banking sector index, Nifty Bank, was down 5% at 30,698.

Among financials, ICICI Bank, Axis Bank, Bajaj Finance, SBI, Bajaj Finance and IndusInd Bank fell between 5% and 8%.

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Many states from the financial hub Mumbai to capital New Delhi are bringing back stricter restrictions on movement of people to curb the surge in cases.

Nifty has tested 14300-14400 support and since 14264 was the recent low recorded and if we break that, the next expected level is 13900, said Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments.

"Selling pressure is quite severe as Nifty fell by more than 500 points and touched 14283 levels. It broke its immediate support zones and sustaining below 50 DEMA. Currently, call writers are very aggressive in Nifty’s weekly expiry; while Put writers are running to cover their shorts," said Jay Purohit, Technical & Derivatives Analyst, MOFSL.

"Going forward, support is placed at 14240 – 14265 zone, which is a confluence of previous swing low and 100 EMA on daily chart. Currently, market is showing signs of weakness and a move below 14240 may drift index towards 14000 mark"

On Bank Nifty, he said: "Bank Nifty has breached its crucial support of 100 DEMA and sustaining well below the same. Banking stocks have been underperforming the broader market and weakness could continue. "

If Bank Nifty sustains below 31000, he added, then weakness could be seen towards 30000.

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"Considering current chart structure, traders are advised to remain light on positions," he added.

"Indian Rupee spot slipped past the 75-mark to nine month low of 75.15 today as rising COVID-19 cases sparked fears of a complete lockdown in Maharashtra and a few other states, dampening hopes of a faster recovery and increasing prospects of RBI's ultra-loose monetary policy for a longer period. Already, the domestic currency has been battered by 2% since the RBI unexpectedly announced QE style G-sec acquisition programme (G-SAP) last week," said Kaynat Chainwala - Fundamental Research Analyst Currencies, Anand Rathi Shares.

India’s virus resurgence has prompted some brokerages to reconsider their preference for stocks most sensitive to the economic recovery. Nomura cut the weight of financials and cement shares in its model portfolio, while Jefferies downgraded Indian banks to underweight from overweight.

Not everyone is pessimistic. India’s long-term outlook remains strong and any decline in equities due to the new wave of infections should be used as entry point by investors, according to Prabhudas Lilladher Ltd. (With Agency Inputs)

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