Investors have lost nearly Rs 26 lakh crore in the last eight trading sessions, signaling weakening of market sentiment this month. Market cap of BSE-listed firms, which stood at Rs 266.97 lakh crore on April 29 this year, has slumped to Rs 241.13 lakh crore on May 12 this year.
Unabated foreign capital outflows from the equity market, firm crude oil prices, ongoing Russia- Ukraine war and high inflation in India have prompted investors to exit capital markets and look for safe havens.
In merely eight trading sessions, foreign portfolio investors (FPIs) have withdrawn Rs 23,665 crore from the Indian equity market this month. That’s a massive amount when compared to Rs 40,652 crore worth capital outflows in April by these investors.
On similar lines, Sensex has lost 4,130 points this month. The 30-stock index which closed at 57,060 on April 29 closed at 52,930 in the previous session.
Nifty too slipped 1,294 points during the period.
The index closed at 15,808 on May 12 against the close of 17,102 on April 29 this year.
The Indian market closed in green only on May 5 this month. Sensex rose 33.20 points (0.06 per cent) to end at 55,702.23 and Nifty inched 5.05 points (0.03 per cent) to 16,682.65.
On other days, Sensex and Nifty closed in the red.
The gloom in the market has prompted investors to think what direction it will take in the upcoming sessions of this month.
Here’s a look at what analysts expect from the market in the future.
Osho Krishan, Sr. Analyst – Technical & Derivative Research, Angel One said, “The previous swing low of 15,670 is not far away, and it would be a matter of time to retest the same. Though the market subsidised in the oversold region for quite some time, a further correction could be disruptive in the coming period.”
For the time being, any breach below the 15670 odd zone would bring the possibility for the index to shed another 200-300 odd points in the near period. On the higher end, the 16000-16050 zone is expected to act as immediate resistance, while the strength only could be seen above the 16500-16650 zone.”
Prashanth Tapse, Vice President (Research), Mehta Equities said, “Technically, Nifty (15,842) is trying to defend and hold 15,800 physiological mark with logical support near 15697 levels. Any short covering in markets and close above 16000 mark in Nifty can bounce back to 16,600 levels.”
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities said, “Markets continued to remain under pressure in sync with the crash in global markets as worries of more interest rate hikes coupled with sluggish economic growth going ahead weighed on sentiment. The ongoing conflict and lockdowns in China due to virus spread is promoting investors to shun equities.”
“For Nifty50, short term sentiment remains weak with resistance placed at 16400 levels – no strong reversal attempt and confirmation is seen yet. Medium term trend support is placed at 15500 – breach of the same can have significant implications for the short term, Chouhan added.