18 Nov , 2021 By : Kanchan Joshi
Indian markets fell sharply today with Sensex falling over 500 points, extending losses to the third day, and Nifty struggling to hold 17,700 levels. Analysts attributed the selloff to weak global cues and relentless selling by FIIs in Indian markets. Sentiment was also dented after Paytm made a tepid debut. Shares in Paytm plummeted 25% in their market debut after it completed India's biggest-ever IPO. Shares were changing hands at about Rs1,600 in early trade versus the offer price of Rs2,150.
“The market momentum has weakened recently and the market appears to be heading for a risk-off mode. Lofty valuations, downgrading of India by many foreign brokerages, and sustained selling by FIIs have contributed to this weakness in the market," said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments, said: “Nifty in a definite range which is between 17600 and 18100. Even though this might be a wide range, the movements are volatile and traders should abstain from trading until we do not get past either levels. A breakout on the upside or a breakdown on the downside will result in a 400-500 point move."
Asian markets slipped today after US shares pulled back overnight amid home building data signaling high materials prices and labor shortages.
Investors are grappling with the risk that the Federal Reserve will taper asset purchases and hike interest rates more quickly than expected to fight price pressures. Traders are also waiting to see if President Joe Biden picks incumbent Jerome Powell or Lael Brainard as the Fed chair nominee.
“Globally, fresh Covid cases in parts of Europe are also concerns. There is fear that fresh Covid- related disruptions may further aggravate supply side issues adding fuel to the inflation fire. Investors have to be careful in their stock purchases in this context," said Vijayakumar of Geojit.
“Risk-averse investors can consider partial profit booking. Market declines may be used to buy high quality large-caps in performing sectors with earnings visibility such as IT, financials, cement, paints and autos. Investors should expect only moderate returns over the next 12 months," he added.
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