Sensex falls 300 pts, Nifty dips below 24200 amid weak cues; eyes on RBI policy outcome

According to analysts, global factors and headwinds are likely to persist which could continue to impact Indian markets over the next few days. While Nifty saw a relief rally in the previous session, volatility cannot be ruled out, they said.

Bears returned to Dalal Street on August 8 as benchmark indices opened with losses amid weak global cues. At 09:18 am, the Sensex was down 194.87 points or 0.25 percent at 79,273.14, and the Nifty was down 56.40 points or 0.23 percent at 24,241.10.

About 1,460 shares advanced, 990 declined, and 127 were unchanged. Sectorally, Nifty IT led the losses, falling around 0.8 percent. Nifty Infra, Metal and Energy indices were also trading with losses of around half a percent. On the flip side, Nifty Pharma, FMCG, Bank were trading marginally higher.

All eyes are on the RBI policy outcome today, with the committee expected to maintain the current interest rate. As a result, interest-sensitive sectors and stocks are in focus.

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Fundamental View

According to analysts, global factors and headwinds are likely to persist which could continue to impact Indian markets over the next few days. While Nifty saw a relief rally in the previous session, volatility cannot be ruled out, they said.

Although volatility significantly cooled-off after the sharp surge on Wednesday, there remains potential for further decline, according to Ajit Mishra – SVP, Research, Religare Broking. "Given the current conditions, we maintain a cautious outlook and recommend continuing with a hedged approach," he said.

Technical View

The short-term trend of Nifty seems to have reversed on the upside. Follow-through up move is required from here to consider this as a short-term bottom reversal pattern, according to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

"A decisive move above 24,400 levels could pull Nifty towards another resistance of 24,700 levels quickly. Immediate support is at 24,050 levels," he said.

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Meanwhile, Bank Nifty which witnessed a late surge in the previous session to close well above intraday lows, is likely to "witness a pullback over the next few trading sessions till 50,600 – 50,800 from short term perspective. On the downside, 49,800 – 49,700 is the crucial support zone," said Jatin Gedia, Technical Research Analyst at Sharekhan.

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