Sensex Plunges 400 pts at Open, Nifty Slips Below 17,550; Key Points

Sensex Today: The Sensex and Nifty benchmark indices opened in the red on Wednesday morning. Frontline indices Nifty50 declined 100 points to trade below 17,550 levels and the S&P BSE Sensex dropped 400 points to trade at 58,769 levels.

While Bharti Airtel, IndusInd Bank, HDFC pulled the indices down; HUL, Dr Reddy’s, Nestle India helped trim losses.

Broader markets, however, outperformed benchmark indices as Nifty Midcap 100 and Nifty Smallcap 100 gained up to 0.2 per cent.

All sectors plunged in a sea of red with Nifty IT, Nifty Bank, and Nifty Realty battered in trade.

Tirthankar Das, Technical & Derivative Analyst, Retail, Ashika Stock Broking Ltd., said: “On the technical front, Nifty formed a high wave doji candle suggesting indecision after a rise. There is evidence of reversal pattern in weekly time frame hence in coming sessions, key thing to watch will be a faster retracement above August highs of 18000 that will signal end of the ongoing corrective phase. Else, prolonged consolidation in 17,200-17800 range is expected to continue. On the oscillator front, the 14-period RSI has witnessed a sell crossover and presently trading below the 60-level mark and turned flattish indicating of sluggish momentum for the short to medium term. Thus, one need to avoid trading aggressively amid global nervousness. Considering the present situation, a bare minimum correction of 38.6 per cent of the entire rally from 15,183 to 17,992 comes around 16,900 followed by 50 per cent correction at 16600. On the upside present setup indicates that Nifty can move towards 17,992 followed by 18,114 in the coming days with immediate support stands at 17,350 and Index need to sustain above the said level with some authority for the bulls to strengthen their stance. During the day index is likely to open on a negative note due to weak global cues and is expected to withstand the selling pressure at the crucial support level of 17,350.”

Global Cues

Major Asian shares began sharply lower Wednesday morning, extending their losing streak into a fifth day following another drop on Wall Street, on fears central banks will continue to ramp up interest rates for some time to quell inflation.

Tokyo stocks opened lower on Wednesday, tracking falls on Wall Street amid lingering worries over US rate hike plans. The benchmark Nikkei 225 index was down 0.64 per cent, or 177.41 points, at 27,449.10 in early trade, while the broader Topix index was down 0.63 per cent, or 12.22 points, at 1,914.36.

Wall Street’s main indexes closed lower on Tuesday, the first session after the U.S. Labor Day holiday and summer vacations, as traders assessed fresh economic data in volatile trading.

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