Market capitulates: When will it claw back to 5400?

Indian equity benchmarks closed at seven-month lows on Tuesday and underperformed the global markets by shedding more than 260 points on the Sensex. The Nifty managed to hold the 5300 level as it touched an intraday low of 5,303.40, dragged down by almost all sectors.

Traders looked more nervous after looking at options data - Nifty February 5100 put saw huge addition in open interest - about 33% - with the feeling that there would more downside going ahead. The 30-share BSE Sensex closed at 17,775, down 261 points and the 50-share NSE Nifty fell 83 points to 5,312, after hitting intraday lows of 17,742.18 and 5,303.40. The broader indices saw more sell-off as compared to benchmarks - the BSE Midcap Index was down 2.4% and Smallcap down 3.2%. Will market claw back to 5400? Rahul Mohindar, viratechindia.com, though concerned, says that market may pause at around 5150-5200. He explains that without a global support, the market may drift further downward driven by panic caused by traders.  Mohindar warns that auto and banks may drag the market further. However, Mehraboon Irani, Principal and Head- Private Client Group Business, Nirmal Bang Securities is optimistic that there might be great opportunity in the second half of the year.