Friday crash: Rs 8 lakh cr gone as Sensex, Nifty fall from record highs; where’s the market headed?

The benchmark indices fell from their record highs on across the board sell-off on Friday. Analysts attributed Friday’s market crash to profit-booking amid a correction in the global markets. Market sentiment was also hit as Indian investors were also affected by global Microsoft outage. Dalal Street traders reported technical glitches on many domestic brokerage platforms including Angel One, Nuvama, 5Paise, Motilal Oswal and IIFL Securities.

Sensex ended 739 points lower at 80,604 and Nifty lost 270 points to 24,530 today. Earlier in the day, Sensex scaled a record high of 81,587 and Nifty reached its all-time peak of 24,854.

Later, BSE midcap and BSE smallcap indices slipped 1091.87 pts and 1194.12 pts, respectively.

Investors lost Rs 7.94 lakh crore as market cap of BSE-listed firms fell to Rs 446.38 lakh crore in the current session against Rs 454.32 lakh crore in Thursday’s session.

Infosys, ITC, Asian Paints and HCL Technologies were the only Sensex gainers, rising up to 1.92 per cent.

On the other hand, shares of Tata Steel, JSW Steel, NTPC, Tata Motors, UltraTech  Cement and Tech Mahindra were the top Sensex losers, falling up to 5.17%.

Shares of Infosys ended 1.92% higher at Rs 1792.85 after the Salil Parekh-led firm reported a 7.1 per cent year-on-year (YoY) rise in net profit at Rs 6,368 crore for the June quarter compared with Rs 5,945 crore in the corresponding quarter last year. 

Vinod Nair, Head of Research, Geojit Financial Services said, "The domestic market closed today with a downturn due to the global sell-off, triggered by operating system issues that caused devices to crash worldwide. The global IT outrage has led to disruptions in various Indian industries. The overvalued market is also experiencing profit booking ahead of the budget next week. The recent performance has been bullish in anticipation of pro industry and populist measures."

BSE auto, capital goods, consumer durables and metal indices crashed 1469 pts, 1346 pts,  1166 pts and 1350 pts, respectively. All 19 BSE sectoral indices ended in the red.  

Market breadth was negative with 906 stocks rising against 3014 stocks falling on BSE. 90 shares were unchanged.

Deepak Jasani, Head of Retail Research, HDFC Securities said, "Most Asian indices were down on Friday amid persistent concerns over a renewed trade war between the US and China and as signs of economic weakness overwhelmed the market’s optimism surrounding interest-rate cuts. European shares fell on Friday and were set for weekly losses, impacted by lower commodity prices and as a collapse in global technology shares weighed, even as airlines, media companies, banks and telecoms firms around the world said system outages were disrupting their operations." 

On the technical aspect of today's market, Jasani said, "Nifty formed an engulfing bear pattern on daily charts giving up all the gains of the previous session. It gained 0.12% over the week but formed a bearish shooting star type pattern and closed near the week’s low. The high of the day i.e. 24854 could now be a strong resistance for the near term while 24087-24344 band could provide support."

Rupak De, Senior Technical Analyst, LKP Securities said, "On the daily chart, the Nifty has formed a bearish engulfing pattern, suggesting a possible bearish reversal in the market. The RSI is showing negative divergence, indicating a shift in price momentum. Additionally, the daily RSI has entered a bearish crossover and is emerging from the overbought zone. On the lower end, support is placed at 24,500, below which the index might drift down to 24,400-24,200. On the higher end, resistance is placed at 24,650-24,700."

Osho Krishan, Senior Analyst - Technical & Derivatives, Angel One said, "As far as levels are concerned, a sustainable plunge below 24,500 is likely to provide some more respite to the benchmark for a potential downside to 24,300-24,200 (20 DEMA) on an intermediate basis, while the sacrosanct support lies at 24,000 mark. The trading range is highly anticipated to broaden amidst the Budget week, and hence, proper risk management is warranted for the participants. Furthermore, while looking at the elevated parameters and rising volatility caution is recommended. On the contrary, the record high of 24,800-24,850, now could be seen as a daunting task for the Bulls in the comparable period."

FII-DII data

Foreign institutional investors bought Rs 5483.63 crore worth of equities on a net basis on Thursday, while domestic investors bought Rs 2904 crore of shares, as per provisional NSE data.