Rs 3.32 lakh crore investor wealth lost from record highs, analysts see further downside for market

Investors have lost Rs 3.32 lakh crore since equity market indices hit record highs in February this year. Market wealth of BSE-listed firms which stood at Rs 205.80 lakh crore on February 16 has fallen to Rs 202.48 lakh crore today. The decline in market wealth came after investors booked profit post the strongest rally market witnessed after any Union Budget.

Sensex which ended at 46,285 on January 29 climbed 5,819 points in the next 12 sessions to 52,104 (on February 16). Nifty too gained 1,797 points to 15,431 from the January 29 closing of 13,634.

Sensex and Nifty scaled record highs of 52,516 and 15,431 on February 16 amid an extended rally post euphoria over Union Budget on February 1.

But the indices could not hold to gains as weak global cues coupled with rising coronavirus cases led to weakening of market sentiment. Till date, Sensex has lost 3,336 points from all-time high of 52,516 on February 16. Similarly, Nifty has slumped 882 points from record high hit on February 16.

Top losers today: M&M, SBI, Axis, ICICI, IndusInd Bank fall up to 4%

The benchmark indices closed in the red today led by losses in banking, auto and consumer durables stocks. While Sensex slipped 871 points to 49,180, Nifty lost 265 points to 14,549. Today's crash was the worst single-session fall for the indices in nearly a month as investor sentiment was roiled amid rising coronavirus cases in the country.

India recorded 47,262 fresh coronavirus cases in a day, the highest single-day rise so far this year, taking the nationwide COVID-19 tally to 1,17,34,058, the health ministry said on Wednesday.

The daily rise in infections was the highest recorded in 132 days, while the country's COVID-19 death toll increased to 1,60,441, with 275 new fatalities, the highest in around 83 days.

Share Market Highlights: Sensex ends 871 pts lower, Nifty at 14,549; M&M, SBI, IndusInd, Axis Bank leads fall

On Sensex, all shares closed in the red, barring Asian Paints and PowerGrid. M&M was the top loser, falling around 4 per cent, followed by SBI, Axis Bank, ICICI Bank, IndusInd Bank, ITC and L&T. All 19 BSE sectoral indices ended lower, with BSE realty, metal, auto, bankex, industrials and finance indices falling up to 2.93 per cent.

Broader midcap and smallcap indices fell up to 1.69 per cent.

Here's a look at how experts see today's correction and the near-term outlook for the market.

Nagaraj Shetti, Technical Research Analyst at HDFC Securities said, "A long negative candle was formed and this indicates a reversal pattern of the last few sessions up move. Hence, the formation of high wave type candle pattern of Tuesday has turned out to be a reversal pattern as of now. This is negative indication and signal more downside in coming sessions.

Nifty is forming lower highs and lows on the daily chart and is expected to revisit the lower gap support of 14,350 in the short term. This could also mean further down move below the crucial weekly 10 period EMA as per weekly chart at 14580 levels. Previously, this moving average has offered good support for the market in the subsequent weeks and led to upside bounce in the past.

Hence, Nifty not finding support of this moving average this time could mean a chance of broad-based weakness beginning in the market. The short-term trend of Nifty seems to have reversed down after a small upside bounce. Next lower levels to be watched around 14,350-14,300 in the next few sessions before showing another round of small upside bounce from the lows. Any pullback rally could find resistance around 14,675-14,750."

Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities said," Markets are in consolidative phase after having achieved a medium term target of 15,000. Immediate support is seen at 14,300 below which short term selling pressure can increase. We believe the current consolidation can continue for an extended phase with range seen at 14,000-15,600. IT and FMCG stocks trade with positive bias while Metal and Banking remain under pressure."

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities said," Tomorrow ahead of the March 2021 F&O expiry, the market is likely to be in turmoil phase and the Nifty / Sensex may fall to 14350/48580 to 14250/48300 levels. The focus should be on Pharmaceuticals and Technology companies. On the higher side, 14650/49600 and 14700/49800 would be major hurdles."

Sameet Chavan , Chief Analyst-Technical and Derivatives at Angel Broking said ," In today's correction, the selloff was witnessed across the board and hence, further correction cannot be ruled out on the expiry day. As far as levels are concerned, 14,470 - 14,350 are the levels to watch out for; whereas on the upside, 14,650 - 14,700 has become immediate hurdles. We continue to remain cautious and advise against creating aggressive bets in the market for a while."