Nifty fell 242.8 points, or 1.4%, to close at 17,084.5. BSE’s Sensex declined 953.7 points, or 1.64%, to end at 57,145.2. Both indices have fallen close to 4.3% in the past four trading sessions.
Foreign Portfolio Investors net sold shares worth ₹5,101 crore on Monday, while their domestic counterparts were buyers to the tune of ₹3,532 crore. The dollar surged further after the US Federal Reserve projected further increases in interest rates to curb inflation, heightening concerns of a recession.
In Europe, the euro fell to a two-decade low and the sterling skidded to an all-time low against the dollar before recovering a bit on concerns over the UK government plans to boost spending that could stretch the country’s finances to their limit.
The pan-Europe Stoxx 600 was up 0.15%. Elsewhere in Asia, China fell 1.2%, Hong Kong declined 0.4%, South Korea plunged 3% and Taiwan dropped 2.4%.
“The recent fall is not surprising,” said Jyotivardhan Jaipuria, managing director of Valentis Advisors, a Mumbai-based investment firm. “Just remember India has outperformed the world and its valuations are double that of EMs. Global markets will determine Indian markets going forward. Our view is of a range bound market with a slight downward bias.”
The Volatility Index, VIX, jumped 6.3% to 21.89, suggesting traders see near-term risks to the market.
Analysts said there could be a sharper sell off if the Nifty falls below its key support of 16,950, which is also the 200-Day Moving Average (DMA) – a long-term sentiment indicator.
“It has found support at the long-term moving average, 200-DMA, which may act as the line of polarity in the short term,” said Rupak De, senior technical analyst at
. “The momentum indicator is in bearish crossover and falling. The short-term trend looks negative.”
Nifty Midcap 150 dropped 3% and Nifty Small-cap 250 sank 3.3%.
