Stock market today: Indian benchmark indices extended the decline for the 5th straight session as the benchmark BSE Sensex has lost around 3300 points whereas NSE Nifty has crashed around 1,000 points. Nifty Small-cap 100 and Nifty Mid-cap 100 indices have slipped into the negative territory in 2022 i.e., year-to-date time or YTD.

According to stock market experts, this weakness in seen majorly due to the foreign portfolio investors (FPIs) fishing out money from the markets. They expect that the market may continue to remain weak as breakdown is visible in majority of the indices like real estate, Nifty smallcap, midcap, etc. 

Though, believe that the there is a possibility of a sharp rebound in IT stocks as TCS share buyback may trigger fresh buying in the sector.

“This weakness in the markets is due to the FPIs and FIIs fishing out money from the Indian markets. Ahead of Christmas, FIIs had gone on long winter vacation due to week long Christmas festival followed by New Year. At that time they were in net sellers' position when the NSE Nifty was at 16,400 levels. When they came back from vacation, Nifty was above 18,000 and they once again fishing out money from the Indian markets. If we look at the data, FIIs have sold out equities worth Rs11,000 crore in last three trade sessions last week," said Ravi Singhal, Vice Chairman at GCL Securities.

TCS holds trigger for rebound

Singhal believes that the weakness in the Indian stock market may continue for 1-2 more sessions as a good number of quality stocks have given breakdown on chart pattern and much will depend on the Union Budget 2022. 

He further added that if someone is looking forward to take advantage of this continuous selloff, he or she should look at TCS shares. “The large-cap IT stock is expected to announce share buyback that may trigger fresh buying in the new age IT stocks."

"Those who want to play safe, can buy TCS shares at around 3700 to Rs3800 per share levels for short term target of Rs4300 per share levels. However, one must maintain strict stop loss at Rs3550 levels while taking this position," said Ravi Singhal. He said that TCS rebound will trigger fresh buying in other large-cap IT stocks like HDC Tech, Wipro and Infosys.

Expecting sharp rebound in the Indian stock market, Sumeet Bagadia, Executive Director at Choice Broking said, "Nifty has strong support at 17,000 to 17,100 levels and once it gives breakout at 17,500 on closing basis, we can witness sharp upside levels of 17,800 to 18,000 levels. Likewise, Bank Nifty has strong support at around 36,500 to 36,700 levels. It will also become highly bullish once it gives breakout at 37,500 levels on closing basis. After the breakout, we can soon expect 38,500 to 39,000 levels on Bank Nifty index." 

However, Bagadia also believes that TCS buyback may trigger rebound in Indian markets as DIIs may look at safer options like TCS in the aftermath of heavy FIIs selling.