Despite a sea of red seen across the market on February 17, bulls fought back in trade, pushing the frontline indices the Sensex and Nifty 50 sharply off their day's lows. While the Sensex recovered 500 points from its day's, the Nifty managed to recoup 150 points.
Volatility remained high in the session thus far, with the two benchmarks witnessing wild swings in attempts to recover into the green.
At 1.06 pm, the Sensex was down 216.46 points or 0.29 percent at 75,722.75, and the Nifty was down 63.20 points or 0.28 percent at 22,866.05. About 915 shares rose, 2,658 fell, and 134 were unchanged.
The markets are facing a raft of headwinds that has heavily weighed on investor sentiment, increasing risk aversion. Continued exodus of foreign flows, the sliding rupee, and fears of reciprocal tariffs on Indian exports by US President Donald Trump, coupled with escalating trade tensions between the US and Europe due to Trump's tariff policies, have collectively weighed down on market confidence.
In the absence of domestic triggers, markets are tracking global developments, most of which are sending across waves of uncertainty for India Inc. As a result, the volatility-gauge, India VIX surged over 6 percent in trade to 16.
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The weakened investor sentiment has also led to an underlying 'sell-on-rise' sentiment which has prohibited the market for making any substantial recovery in the nine sessions now. This comes even after technical analysts have pointed the oversold market conditions.
Meanwhile, the broader market continued to face steeper selling, with the Nifty Smallcap 100 and Nifty Midcap 100 tumbling up to two percent. Several analysts have cautioned that valuations in the broader market still stood high despite the sharp correction in recent times.
On the sectoral front, most indices suffered cuts, with the Nifty Realty, Nifty Auto, and Nifty Media indices recording the sharpest losses, falling between 1-1.5 percent. On the flip side, the Nifty Pharma was the only major sector in the green, aided by names like Glenmark Pharma, Aurobindo Pharma and Granules India that rose up to 5 percent.
However, the Nifty 50 might see a bounce-back from its 9 consecutive session of losses, according to domestic brokerage JM Financial, based on its analysis of daily price returns.
The frontline index might see a trend reversal after closing in the red for the eight previous sessions and trading with losses for the ninth day. "A historical analysis of the daily price return indicates that the Nifty has seldomly closed in the negative territory for 8 or more consecutive sessions. Any such occurrence is followed by an up-move in the index on a 1-month and a 3-month basis," said the brokerage.
From a technical standpoint, any decisive breakdown below the 22,800-22,700 zone could trigger fresh room for 22,500-22,400 in the near period, potentially a decline of nearly 15 percent from the all-time high, noted Sameet Chavan, Head Research, Technical and Derivative - Angel One. On the flip side, a series of resistances could be seen, starting from 23,300-23,350, followed by 23,500. Only a breach of these levels could provide some relief for market participants.
Experts suggest that looking at the ongoing correction, it is best to avoid aggressive bets and stay light on positions on either side. Simultaneously, the vulnerability of the market emphasizes the need for traders to remain vigilant and consider risk management strategies as market conditions evolve.
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