The benchmark BSE Sensex fell over 3,817 points in a five day fall in Dalal Street, as investors lost nearly 20 lakh crore in wealth in a five day fall on Monday. The 30 share index fell 6.23 per cent to 57,491. The 50-share NSE Nifty index also fell 6.33 per cent to 17,149. Amid the sell-off, the combined market value of BSE-listed firms fell by Rs 19.52 lakh crore to Rs 260.50 lakh crore from Rs 280.02 lakh crore on January 17. Market watchers believe that weak global cues, heavy selling by foreign institutional investors FIIs and risk-off sentiment across the globe and the US Fed have dampened the mood in the domestic equity market.
Amar Ambani, senior president and institutional equity head, YES Securities, sees weakness in the equity market. Indian equities corrected massively, possibly due to US equities trending lower and rise in crude oil prices. There were no positive triggers to take the market upward in the near term. A further 500 points downside can't be ruled out in the Nifty. Omicron didn't disrupt the economy, and corporate earnings have been positive so far. In 2022, I am confident that Nifty will reach a higher high than what we saw in 2021, because of the structural story. Hero MotoCorp went up 0.39 per cent and Power Grid Corporation of India increased 3.46 per cent. Other components of the Nifty index wiped off investors wealth during the same period. Bajaj Finserv came in with a drop of 14.76 per cent, as the top loser in the index. Tech Mahindra was down 12.60 per cent Divi s Laboratories down 12.40 per cent, and Shree Cement fell 11.57 per cent, Wipro, JSW Steel, HCL Technologies, Infosys, Tata Steel and Adani Ports also fell by 11.57 per cent.
Hem Securities said that we believe this is an overreaction to the US Fed tightening and we may witness a rally in the short term after the FOMC meeting. We believe that the correction should be used as an opportunity to accumulate quality stocks in tranches and that investors should use it as a bullish view on the Indian economy. 17,000 and 17,500 are immediate support and resistance in Nifty 50 on the technical front. For Bank Nifty 36,500 and 37,500 there is immediate support and resistance. Foreign Institutional Investors FIIs had net sellers in the equity segment last week, with gross purchases of 33,196. There were 95 crore and gross sales of Rs 43,844. 86 crore led to a net outflow of Rs 10,647. There were 91 crore.
The market is reacting to US Fed tightening and we may see some short-covering after the Fed meeting outcome on Wednesday.