Bears tighten grip on Dalal Street! Here's what to expect today

On Thursday, equity benchmark Sensex dived over 1,500 points to hit an intraday low of 52,669.51 and Nifty also tanked over 400 points amid an extremely weak trend in the global markets.

The 30-share BSE benchmark settled 1,416.30 points lower at 52,792.23. The broader NSE Nifty tumbled 431 points to 15,809.40.

Which way will Dalal Street swing today? Here's what experts say

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd noted that the rout in other Asian indices and European gauges triggered a massive sell-off in local equities as both Sensex and Nifty ended below their crucial psychological levels of 53k & 16k, respectively.

"Investors fret over stagflation risks and Federal Reserve's more hawkish stance to rein in inflation by opting for more rate hikes, which would have a bigger impact on the economy going ahead. Till the time FIIs remain net sellers, the south-bound journey will be difficult to reverse. In addition, post gap down opening, the Nifty has formed a bearish candle which indicates further weakness from the current levels," he said.

"Currently, the index is trading near the 15700-15750 support level, hence a quick pullback rally is not ruled out if the index succeeds to trade above 15700. For traders, as long as the index is trading below 15900, the correction wave is likely to continue and below the same it could retest the level of 15700," he noted.

"On the further down side, the index could slip to 15600. On the flip side, above 15900, the Nifty could move up to 16000-16100 levels," he added.

"On a daily chart, Nifty has formed a bearish candle which indicates downside momentum for an upcoming session. Moreover, Nifty is facing support from horizontal line i.e. 15,750 levels which is make or break level. In addition, Nifty has been sustained above the 21-Monthly Moving Average which indicates a bounce back from lower levels can be seen," Palak Kothari, research associate, Choice Broking.

"However, the momentum indicators MACD & Stochastic were trading with a negative crossover & trading in oversold zone which is a sign of sideways to negative trend in Nifty. The Nifty may find Strong support around 15,700 levels, breaching below it can show more downside till 15,500 levels while on the upside 16,000 may act as an immediate hurdle. On the other hand, Bank nifty has support at 32,800 levels while resistance at 34,500 levels," Kothari added.

"With prospects of a sizeable interest rate hike by the global central banks, investors are advised to allocate higher weightage to sectors that are least affected by such policies like defensives," said Vinod Nair, head of research, Geojit Financial Services.

"In this highly volatile market, investors can focus on sectors like FMCG, pharma, capital goods and manufacturing whose valuations are moderate and reasonable on a long term basis," he added.

"On the technical front, the key resistance levels for Nifty50 are 16,000 and on the downside 15,600 can act as strong support. Key resistance and support levels for Bank Nifty are 33,700 and 33,000 respectively," said Mohit Nigam,  Head - PMS, Hem Securities.

Also read: Bloodbath on D-Street: Sensex dives over 1500 points! What should investors do?