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Sensex falls below 39,000 again; here’s what to expect in coming days

Ashish Pandey
sensex, niftry, nse, bse, stock markets

Heavy selling in the last hour Thursday pushed the benchmark indices to end at day s low. Nifty closed below 11,650 while Sensex slipped more than 300 points on the day when April futures and options (F&O) contracts expired. The sell-off in auto, metal, energy and financial stocks as surging crude prices and depreciating rupee weighed on investor sentiment.

Sensex finished at 38,730.86, down by 323.82 points, or 0.83 per cent. NSE Nifty too fell below the 11,650 mark.

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Tata Steel, Vedanta, Maruti, SBI, Coal India, Tata Motors, Sun Pharma, HUL, RIL, IndusInd Bank, Axis Bank, HDFC duo, ICICI Bank, M&M, Kotak Bank, and Infosys, were the top losers in Sensex. Among the gainers include Bharti Airtel, TCS and Bajaj Auto.

“The market fell by 0.72% today, the sell-of is broad based with many indices in Europe declining and futures pointing to a negative opening in the US. This is largely on account of three factors firstly some earnings releases in India have been disappointing, secondly oil prices have been a dampener on sentiment, thirdly some data outside has disappointed, like South Korean GDP declined and some earnings miss in the US,” Vivek Ranjan Misra- Head of Fundamental Research, Karvy Stock Broking.

Meanwhile, the benchmark indices ended their three-day losing streak on Wednesday buoyed by strong corporate earnings. The Sensex regained the 39,000-level by surging 1.3 per cent or 490 points to end the day at 39,055 yesterday.

Technical view

The sharp short covering that the markets witnessed was much due to rollovers and options writing. It was observed that huge call writing was done of the 2 available strike prices above the 11575 levels. This was to take benefit of the premium that was available on the calls that was offering attractive yields by today’s expiry. What we saw today was that once this rollover infused trades are done, broader technical factors took over , Milan Vaishnav, CMT, MSTA told Financial Express Online.

Nifty may test its immediate short-term support level of 11,550 in the coming week, he added. On the upsides the moves will remain capped above 11700 level. Any breach of 11550 on the downside will inflict more weakness in the markets, he also said.