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

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. 

Persistent foreign fund outflows and a spurt in crude oil prices also dampened sentiment. 

Parth Nyati, founder, Tradingo said, “Global inflation has become the biggest spoilsport and has derailed the economic growth recovery globally. The post-pandemic inflation which was once believed to be transient has now become an entrenched one.” 

“This has created a huge sell-off and meltdown in the majority of the stock markets globally. India's WPI inflation jumped to a 17-year high, this will force RBI to further hike interest rates. All these factors have collectively led to over a 2 per cent fall in Nifty and Sensex. However, we believe that investors must be greedy when others are fearful and use this opportunity to lap up quality shares with good growth prospects and reasonable valuations,” Nyati 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. 

Mohit Nigam,  Head - PMS, Hem Securities noted that rising inflation in the US and a downgrade of the global economic forecast is the major cause for the global sell off. Investor sentiments got a hit after the hike in LPG prices and Nifty IT was the biggest dragger and fell almost 6 per cent. 

"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," he added.