Why Sensex crashed 1400 points in two days — explained
Stock market today: Key benchmark indices extended sell of for second stright session on Thursday as global market cues continue to remain weak after Fitch downgrading US credit rating. Sensex today opened lower and went on to hit intraday low of 65,069 levels, logging near 1400 points in the last two trade sessions. Nifty 50 index and Bank Nifty index too remained under sell off pressure and went on to lose their immediate support placed after the closure of Wednesday deals. Nifty today breached its support placed at 19,400 and made intraday low of 19,296 while Bank Nifty index broke down its support placed at 44,500 and touched intraday low of 44,279 levels. In broad markets, small-cap and mid-cap indices have lost to the tune of over 0.30 per cent and around one and half hour of trade session is still left on Thursday.
Trigger for sell off
According to stock market experts, Indian stock market was climbing a new highs on a regular basis and market was in wait of a strong profit-booking trigger that happened in the form of Fitch downgrade of US credit rating on Tuesday. However, they maintained that Indian stock market is one of the strongest emerging markets and FIIs are expected to continue pumping money in the Indian markets after this credit rate downgrade. They advised fresh investors to add consumer durable and chemical stocks in their portfolio while initiating bottom fishing. However, they advised value pickers to remain vigilant about important levels in regard to Sensex, Nifty and Bank Nifty.
Speaking on reason for stock market crash, Vaibhav Kaushik, Research Analyst at GCL Broking said, “Indian equity market was in uptrend for long and Dalal Street was awaiting for a strong profit-booking trigger. This happened on Tuesday when Fitch downgraded US credit rating from AAA+ to AAA. This turned global market sentiments negative including Indian stock market. However, investors are advised to remain vigilant about the important levels like 19,250 on Nifty, 44,400 on Bank Nifty and 62,970 levels on BSE Sensex. These are some important levels as market had managed to respect these levels during the previous bear market.”
On when a positional investor can initiate bottom fishing, market expert Anuj Gupta said, “If nifty today closes above 19,250 and sustains above this level, then my advice is to initiate buying once it closes above 19,600 mark. In case of Sensex, if the index manages to respect 62,970 levels, then one should start initiating one’s preferred stocks once it closes above 64,720 mark. Similarly, if the Bank Nifty manages to sustain above 44,300 then one can start accumulating once it closes above 44,800 levels.”
Stocks to buy in stock market today
On stocks to buy during bottom fishing, Vaibhav Kaushik at GCL Broking said, “One should look at consumer durables and chemical stocks. In consumer durables Dixon Technologies and Voltas is looking good stock to buy whereas in chemical segment Navin Fluorine and SRS shares are looking strong from fundamental and technical perspective.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 03 Aug 2023, 02:49 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.