Negative global cues led to more than 2 per cent fall in the benchmark indices Sensex and Nifty. The Sensex dropped 1,037.36 points, lower at 33,723.53, in early trade before a partial recovery. The US market turmoil first impacted Asian markets and then contagion spread to the Indian market as it opened on Thursday. The Sensex finally closed at 759.74 points, or 2.19 per cent, to close at 34,001.15, while the Nifty 50 Index closed 225.45 points, or 2.16 per cent, down at 10,234.65. The broader market fall was equally sharp with BSE Mid-cap Index down 2.34 per cent, and Small-cap Index down 1.41 per cent.
Mehul Kothari, senior technical analyst-equity, India Nivesh Securities, said, “Despite Thursday’s sell off, the expected support zone of 10,100-10,000 is still intact. Also, we are observing a hidden divergence in RSI which can lead to a short term bottom formation. In our opinion, the magnitude of Thursday’s fall might be the result of a selling climax. Thus, we expect the mentioned zone to act as a major support going ahead and only a decisive move below the same might bring in further pessimism.
"On the upside, 10,340 – 10,400 might now act as an intermediate resistance above which the pullback could get extended towards 10,540 mark. As of now, we advise traders to keep booking their shorts and wait for a confirmation in order to go long in individual stocks.”
Mustafa Nadeem, CEO, Epic Research said, “Derivatives data did suggest that the range for Nifty is 10,400–10,500 maximum on the upside and 10,100 on the downside, and it could be uglier with that big a range. And bottom fishing would have been much riskier.”
VK Sharma, head of private client group & capital market strategy, HDFC Securities said, "A sharp plunge in domestic stocks in morning wiped off Rs 2.6 lakh crore of investor wealth in just one session. As the session progressed, the market recouped some of its initial losses, with a net fall of 225 points in the Nifty, to close at 10,234. Energy stocks especially oil marketing companies bucked the trend on hope that they will not have to bear excess subsidy burden. Metal stocks fared badly as the recent rally in commodities did not sustain.”