Nifty, Sensex see sell-off amid global meltdown; volatility expected to continue

The biggest Nifty losers were Tata Motors, Adani Ports, ONGC, Hindalco, and Tata Steel

Benchmark indices - Sensex and Nifty - had a rough day on the bourses on August 5, slipping almost three percent each as weak global cues fueled panic selling amongst investors, resulting in a broad-based selloff.

At close, the Sensex was down 2.74 percent at 78,759 and the Nifty was down 2.68 percent at 24,055. About 469 shares advanced, 3,084 shares declined, and 88 shares were unchanged.

Asian markets also fell, mirroring trends from the US markets. Japanese stocks collapsed on Monday in their biggest single-day rout since the 1987 Black Monday. Nikkei 225 shed a massive 12.4 percent, while the Kospi fell almost nine percent and a circuit breaker was triggered. Moreover, Topix fell over 12 percent and Hong Kong's Hang Seng fell over one percent.

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The broader markets, also known as mid-small caps indexes, tanked more than the headline indices and underperformed after slipping 3.4 and 4.2 percent each. "Valuations are a bit expensive in the broader markets. This is also reflected in the fact that Fund managers are sitting on high cash levels," Ruchit Jain, analyst at 5paisa said.

India's VIX also surged by over 42 percent to be at around 20.37. The volatility index rose as much as 52 percent, the highest since August 2015, a nigh-year-high.

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Among sectors, all 13 indexes plunged in today's session. Nifty Metal and Realty were the worst hit, tanking 5 and 4.5 percent, respectively. Metal stocks such as Tata Steel, Hindalco, and JSW Steel were the major laggards. The Nifty Auto and Energy index followed next, slipping almost four percent. Tata Motors was the top loser on the Nifty, tanking almost eight percent on the bourse.

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"While the near-term situation is unpredictable, the long-term outlook on India's growth trajectory remains positive, backed by strong macroeconomic fundamentals. It is advisable for investors not to enter the market immediately as better entry levels will emerge," Atul Parakh, CEO of Bigul said.

The biggest Nifty losers were Tata Motors, Adani Ports, ONGC, Hindalco, and Tata Steel, while gainers included HUL, Nestle, Britannia, Tata Consumer, and Apollo Hospitals.

"Going forward, we may see continued volatility swings with a negative bias due to multiple global headwinds, including the unwinding of Yen carry trades, recession fears in the US, and escalating tensions in the Middle East. On the index front, we are eyeing the 23,250-23,400 zone as key support for Nifty, while the 24,500-24,700 zone will act as resistance in the event of a rebound," Ajit Mishra, senior vice president of research at Religare Broking, said.

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