Relentless selling across the board pulls Nifty down by 260 pts

New Delhi, Oct 23: Pessimism persisted in the Indian bourses as the bears tightened their grip by breaching all the key Nifty support levels to end the session at 19,281.75 with a loss of 260.90 points, said Aditya Gaggar, Director at Progressive Shares.

The Sensex fell 825.74 points to close at 64,571.88.

Relentless selling was seen across the board with media and PSU banking sectors correcting the most. A freefall was observed in mid and small-cap stocks which resulted in the underperformance of the broader markets, Gaggar said.

Head and Shoulder pattern breakdown was seen in Nifty50’s daily chart, which indicates that the weakness will continue going forward as well.

Vinod Nair, Head of Research at Geojit Financial Services, said that despite the healthy performance of private banks and marginal reductions in oil prices, investor confidence remained pessimistic, and a widespread consolidation persisted in the domestic markets.

The global markets echoed the same trend, as the unrest in West Asia has the potential to spiral further.

Increased apprehensions surrounding prolonged elevated interest rates fuelled a continued upward movement in the US 10-year yield. Amid worries over moderation in growth on account of elevated interest rates and higher energy prices, heightened risk aversion was witnessed in the mid and small-cap space, banks, metals, and energy stocks, Nair said.

While a period of consolidation in the short term seems certain, the extent of this phase will be shaped by global factors, he added.

Kunal Shah, Senior Technical & Derivative analyst at LKP Securities, said the bears have maintained a strong grip on the index, resulting in significant selling pressure.

This pressure led to a breakdown of the key support level at 19,500.With the support at 19,500 breached, the next significant support level is at 19,200. If the index fails to sustain above this level, it may experience further declines toward the 18,800-19,000 range.

The overall sentiment for the index remains bearish. As long as the index stays below the 19,600-mark, the view remains bearish, and any upward movements are viewed as selling opportunities, Shah said.