Sensex and Nifty 50 fell nearly 1 percent on May 30, the day of monthly expiry of latter's derivatives contracts. Nifty 50 breached its crucial support level of 22,500, hitting an intraday low of 22,467 ahead of the exit polls on June 1.
"If the Nifty closes below the range of 22,450-22,475 ahead of the exit polls, it may not bode well for the markets. The risk is that Nifty might fall below 22,000. We are approaching a make-or-break point ahead of the exit polls," said an analyst at Indicharts.com.
At close, Nifty 50 was down nearly 1 percent or 216 points at 22,488 while Sensex had dropped 0.8 percent or 617 points to 73,885. Today, marked the fifth day of decline for the benchmarks.
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"Anxiety prevails at Dalal Street with concerns over the ruling BJP's potential slim victory margin impacting bold reforms, as May F&O contracts expired today," said Prasanth Tapse, SVP Research at Mehta Equities.
Out of the 13 major sectoral indices, 9 were in the red. Nifty Metal and Nifty IT fell 3 percent and 2 percent, respectively, emerging as the worst-hit sectoral indices. Meanwhile, Nifty Bank rose 0.7 percent.
Tata Steel, Infosys, and TCS were amongst the ones that contributed the most to Nifty's decline. Tata Steel was also the worst-hit stock on Nifty 50, falling nearly 6 percent after the company reported a decline in its net profit for the quarter ended March. Conversely, ICICI Bank, Axis Bank, and HDFC Bank recorded the most gains among Nifty 50 stocks rising 0.4-1-1 percent.
In the broader market, both BSE Midcap and Smallcap indices fell over 1 percent each.
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Many believe the domestic markets have somewhat decoupled from global markets, with traders primarily focused on the general elections for cues. However, Sameet Chavan, Head of Research, Technical and Derivatives at Angel One, noted that lately, Indian markets have been catching up with the US markets. Chavan advised traders to monitor developments in the US.
US and other Asian markets were down due to rising Treasury yields and uncertainty over potential Federal Reserve interest rate cuts. In light of ongoing uncertainty, Chavan advised traders to avoid aggressive moves and wait for volatility to subside.
Volatility is expected to heighten on June 3 and June 4, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. "If the exit polls indicate a clear trend favorable from the market perspective, buying decisions will be easier even after a spike in prices," he said.
Today, India VIX fell flat at 24.2.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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