Closing Bell: Sensex Crashes 4,390 Points, Nifty Dips Below 22,000 as NDA Falls Short

Overview

Today's market session was marked by a significant downturn, with benchmark indices experiencing sharp declines amid a wave of panic selling. The Nifty index closed at 21,844.50, down nearly 6%, effectively erasing the gains of the past four months. All key sectors, except FMCG, faced substantial losses, with PSUs, energy, and metals being the hardest hit. The broader indices, including the Midcap and Smallcap indices, also suffered heavy losses, each down around 8%.

Key Indices Performance

• Nifty 50: Closed at 21844, down 5.93% (1,379 points).
• Sensex: Closed at 72079, down 5.74% (4,389 points).
• BSE Midcap: Fell by 8%.
• BSE Smallcap: Fell by nearly 7%.

Sectoral Performance

• PSUs, Energy, Metals: Faced the most significant declines.
• FMCG: The only sector to remain in the green.
• Realty, Telecom, Metal, Capital Goods, Oil & Gas, Power, PSU Bank: Down more than 10% each.

Key Support and Resistance Levels

Nifty

• Immediate Support: 21,600
• Crucial Support: 21,100 (200-day moving average and 50% Fibonacci retracement level)
• Further Decline Support: 20,560 (61.82% Fibonacci retracement level)
• Immediate Resistance: 22,310 - 22,550
• Consolidation Range: 21,000 - 22,500

Bank Nifty

• Immediate Support: 46,150 - 44,000 (200-day moving average and 38.2% Fibonacci retracement level)
• Immediate Resistance: 48,600 - 49,200

Technical Analysis

The Nifty index has decisively broken down below the previous swing low of 21,820, violating the higher top and higher bottom formation. This suggests a change in the short-term trend, indicating potential retracement of the rise from 18,840 to 23,340 observed between October 2024 and May 2024. The daily chart shows a massive red candle, suggesting extreme pessimism and continued volatility.

Market Sentiment

The unexpected election outcome triggered fear selling, reversing the recent substantial rally. Despite this, market expectations of stability within the coalition, led by BJP, suggest a mitigated substantial downside in the medium term. The political shift towards social economic policies is expected to positively impact the rural economy.

Investment Strategy

Given the current market volatility and uncertainty:

• Traders: Should remain cautious and limit trades until stability returns.
• Investors: Can use this opportunity to accumulate quality stocks available at bargain prices.

Key Losers and Gainers

Biggest Losers on Nifty

• Adani Ports
• Adani Enterprises
• ONGC
• NTPC
• SBI

Biggest Gainers on Nifty

• HUL
• Nestle
• Britannia Industries
• Hero MotoCorp
• Tata Consumer Products

Conclusion

Today's sharp market decline, driven by election results and subsequent panic selling, has altered the short-term market trend. With key indices breaching critical support levels and forming bearish patterns on the charts, caution is advised for traders. Investors, however, might find this downturn an opportune moment to invest in quality stocks. The market is expected to remain choppy, and participants should wait for signs of stability before making significant trading decisions.