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The defeat in other Asian indices and European gauges triggered a massive sell-off in local stocks as both Sensex and Nifty closed below their crucial psychological levels of 53000 and 16000 respectively. Investors fretted over stagflation risks and the US Federal Reserve's more hawkish stance on curbing inflation, opting for further rate hikes that would have a bigger impact on the future economy. Until FIIs remain net sellers, it will be difficult to reverse the journey south. Furthermore, the Nifty formed a bearish candle after the gap down opened, suggesting further weakness from current levels. Recent gains reported by US retailers reflected the heat of high retail inflation, leading to defeat on Wall Street. Indian benchmark indices closed lower for the second straight session on May 19 with Nifty closing near the 15,800 level. At the close, the Sensex fell 1416 points to 52792 and the Nifty fell 430 points to 15809 along with mounting fears of an economic slowdown wreaked havoc on the domestic market. In this highly volatile market, investors can focus on sectors such as FMCG, pharmaceuticals, capital goods and manufacturing, where valuations are moderate and reasonable over the long term. The Nifty ended near the daily low, closing at 15800. The broader indices also traded in sync with the benchmark, losing in the 2.5-3% range. This drop shows that the bears are in control as the Nifty has completely reversed recent gains and is back closer to the March lows. And the signs of the global indices, especially the US markets, are pointing to a further decline. Traders should adjust their positions accordingly. Currently, the index is trading near the 15725-15775 support level, so a quick pullback rally is not out of the question if the index manages to trade above 15800.As long as the index trades below 15800 the corrective wave for traders is likely to continue and below that it could retest the 15700-15600 level. On the further downside, the index could slip to 15500. On the other hand, above 15950 the Nifty could rise to 16050-16100
Resistance: 15800, 15900, 16000
Support: 15700,
15600, 15500
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