Mumbai, Oct 4 (IANS) The Indian equity market extended its corrective phase for the eighth consecutive week, with benchmark indices ending sharply lower amid sustained foreign fund outflows, rising crude oil prices and weak global cues.
The bearish sentiment persisted throughout the week. The Sensex fell 1.52 per cent on Monday and continued to witness losses over the following sessions before dropping another 0.79 per cent on Thursday. Overall, the 30-share index lost 1,670.84 points during the week, while the Nifty declined more than 3 per cent.
On Thursday, the Sensex and Nifty closed lower for the fourth straight session as persistent selling by foreign institutional investors (FIIs), elevated bond yields and a fresh rise in crude oil prices weighed on investor sentiment.
The Sensex fell 570.59 points, or 0.79 per cent, to settle at 71,909.70. During intra-day trade, it plunged as much as 1,187.41 points to touch a fresh 52-week low of 71,292.88. The Nifty dropped 198.50 points, or 0.88 per cent, to close at 22,421.95.
Despite the prevailing weakness, market experts said technical indicators point to the possibility of a short-term recovery.
Market experts said the Sensex remains below its key moving averages, with the index trading under the 50-day exponential moving average (EMA) of 75,544.56 and the 200-day EMA of 77,684.60.
“The immediate support zone for the index is placed between 71,000 and 71,200, while resistance is likely to emerge in the 72,300-72,500 range,” analysts stated.
Analysts said that while the broader market structure remains weak, oversold readings and the proximity of important support levels could help the indices stage a relief rally in the near term.
Market watchers said traders may consider a hedged approach as market conditions remain volatile. “Participants may adopt a hedged approach, with 22,800 as the initial upside target, followed by 23,100-23,200. A decisive break below the April low could negate the rebound possibility and drag the index towards 21,700-22,000,” market watchers stated.
Analysts said the market’s near-term direction will largely depend on global cues, crude oil prices, bond yield movements and the trend in foreign institutional investor activity.
–IANS
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