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How Dalal Street Reacted To The Worst Decline In Over Four Months

Here’s what market experts had to say about today’s fall

The Bombay Stock Exchange (BSE) logo sits on a cordon at the exchange building in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)
The Bombay Stock Exchange (BSE) logo sits on a cordon at the exchange building in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Nearly Rs 3 lakh crore of investor wealth was wiped out in the stock markets today amid fears of sustained high crude oil prices and geopolitical tensions.

That came after the benchmark S&P BSE Sensex clocked its worst decline since Sept. 3, 2019. The 30-share index closed 1.9 percent, or nearly 788 points, lower at 40,676.63.

The NSE Nifty 50 closed 1.91 percent lower to end below 12,000. The broader markets represented by the NSE Nifty 500 Index ended 1.95 percent lower.

How Dalal Street Reacted To The Worst Decline In Over Four Months

Here’s what market experts had to say about today’s fall

Current Rally In Crude Unlikely To Sustain, Chakri Lokapriya Says

It’s highly unlikely that the current rally in crude oil prices will sustain and hence it will not have any impact on India’s fiscal situation as an oil importer, Chakri Lokapriya of TCG Asset Management Company said.

“The banking NPA (non-performing assets) resolution is key for recovery of Indian economic recovery,” Lokapriya told BloombergQuint. “If the same happens, we can see a 10 percent rise in the large-cap index from the current levels.”

No Further Fall Expected, Says Deven Choksey

The fall in the market is related to the nervousness among investors regarding global war threat, according to Deven Choksey of KRChoksey.

“We do not expect the fall to sustain unless there is a massive disruption seen globally,” he told BloombergQuint in an interaction.

He said oil prices are highly unlikely to sustain at the current high levels as Iranian crude oil was already under sanctions. “As the situation normalises, which is likely, the panic situation will ease out,” he said.

Wait And Watch As More Correction Expected: Inditrade Capital

The fall in equity indices today isn’t the last of the corrections as more U.S.-Iran geopolitical risks could be in the offing, according to Sudip Bandopadhyay, group chairman of Inditrade Capital.

“Rising oil prices will create significant fiscal problems for the Indian economy,” Bandopadhyay told BloombergQuint. “Better to wait and watch rather than buying in the current market.”

Accumulate Bank, Financials & Paint Stocks: Complete Circle Consultants

Investors should use the current fall in stocks as an opportunity to “gradually” accumulate their holdings in banks, financials and paints, Gurmeet Chadha, co-founder and chief executive officer of Complete Circle Consultants, said.

Investors should let the event play out and markets will soon start reflecting the extent of impact this event can have. Some correction is healthy, especially in quality financials like Bajaj Finance Ltd. and HDFC Bank Ltd. which have had a great festive season, and ICICI Bank Ltd.

Go Short On Nifty Only If There’s A Bounce, Says Religare Broking

The vertical decline is greater than our expectation, said Ajit Mishra, vice president and senior technical analyst of equity research at Religare Broking.

“One should wait for a technical rebound for the near term considering the current scenario,” Mishra told BloombergQuint. “In such a case, I recommend going short around 12,100 levels with 12,200 as the resistance for stop loss while 11,850 is the target area.”

Opinion
Investors Lose Rs 3 Lakh Crore As Sensex, Nifty Log Worst Fall In Four Months