Indian stock markets fell sharply today, led by losses in IT stocks, as fears of a global economic slowdown forced investors to drop riskier assets. The NSE Nifty 50 index ended 2.65% down at 15,809, while the Sensex lost 1,400 points. , wiped out most of the recent gains . Asian and European stocks also fell today after an overnight sell-off on Wall Street, which saw the S&P 500 fall the most since June 2020.
In line with the weak market trend, the market capitalization of BSE listed firms fell 6,71,051.73 crore to stand on 2,49,06,394.08 crores.
All major Nifty sub-indexes fell with the Nifty IT index falling 5.74%. Analysts at JPMorgan said on Thursday that rising inflation, supply-chain issues and the Ukraine war-ravaged growth spurt that India’s IT services industry enjoyed during the pandemic. Infosys, Wipro, HCL Technologies, Tech Mahindra and Tata Consultancy Services (TCS) fell between 5% and 6%.
On the other hand, ITC rose 3.3% and was one of three gainers on the Nifty, with the cigarette-to-hotel conglomerate reporting a jump in March-quarter gains late on Wednesday.
“The pace of growth in the global economy is slowing down due to liquidity tightening by central banks. The Russia-Ukraine conflict is also showing no signs of easing, with energy and food prices remaining high. Both these variables point to a stagflation type of scenario on a global scale, which could lead to lower discretionary spending. This is driving greater volatility in global equity markets, including India, said Navin Kulkarni, Chief Investment Officer, Axis Securities.
“We expect market volatility to remain volatile in the near term, but market prices under the influence of global slowdown and higher rates expect better market conditions in the second half of the financial year,” he added.
Nifty Technical Outlook
Subhash Gangadharan, Senior Technical and Derivatives Analyst, HDFC Securities, says: “Zooming into the 15-minute chart, we see that nifty has reversed the recent pullback rally and has now closed near the recent low of 15735. The 20 period MA on the 15 minute chart is now below the 50 period MA indicating a negative moving average crossover. A fresh decline is likely once the 15735 support is broken.”
“While we are open to pullback rallies in the very near term, we expect the downtrend to continue. The bears will gain more control after a break above the recent intermediate low of 15735.”
Shrikant Chauhan, Head of Equity Research (Retail), Kotak Securities Limited said that as long as Nifty is trading below 15900, the correction wave is likely to continue and below that it may retest the 15700 level. . On the other hand, the index may slip towards 15600. On the other hand, above 15900 Nifty can go up to 16000-16100 level.”