The market started the week on a shaky wicket as key benchmark indices opened in negative territory and witnessed selling pressure through the day. Sentiments were hit after a private survey showed a deterioration in India's services sector last month. Weakness in global markets added to the woes.
The Sensex plunged 300.16 points, or 0.88 per cent, to settle at 33,746.78 while the Nifty fell 99.50 points, or 0.95 per cent to 10,358.85.
The Sensex closed below the 34,000 level after falling below that level in early trade and the Nifty settled at its lowest closing levels in more than 11 weeks.
The BSE Mid-Cap Index fell 0.95 per cent and the Small-Cap Index fell 1.09 per cent.
Sameet Chavan, chief analyst-technical and derivatives, Angel Broking, said: At the end of Monday’s session, we are in a complete dilemma, as we can see entirely contrasting close from two key indices, the Nifty and the Bank Nifty. We were closely keeping a track of 10,400 for the Nifty, which has been violated now; but at the same time, the banking index has managed to defend its make or break level of 24,780 on a closing basis. In fact, all major components of Bank Nifty are indicating some relief move from their current support zones. So, we are in two minds whether to go with the benchmark index or the major contributor Bank Nifty.
Hence, it would be a prudent ploy to revise
the support level a bit
for the Nifty in order to trigger some momentum in the immediate future. Now, 10300 would be
seen as a crucial support and a breach below this important junction would extend this corrective move towards the ‘200-day SMA’ placed around 10,140.
“Having said that if we have to pre-empt any direction, we would give more weightage to the way Bank Nifty is shaped up. We will not be surprised to see some bounce back in the market; courtesy to the banking basket”
Jayant Manglik, president, Religare Broking, said: “It was the fear of possible trade war, after the US President’s plans to impose new tariffs on steel and aluminum imports, that rattled global markets, including ours. Besides, the report that foreign investors have pulled out more than 11,000 crore from the equity market in February was further weighing on the sentiments.
“First, local factors viz. banking fraud, mixed macroeconomic data were pushing the markets lower and now the global sentiment has turned sour. We advise continuing with the "sell on rise" approach and focusing more on the stock selection.