Taking Stock: Sensex, Nifty at eight-month low in broad-based selling, IT and metal shares weigh

Market Today

Benchmark indices extended their fall for a fifth session in a row on February 24, taking the Nifty 50 to the lowest level in last eight months, led by selling in IT, Realty and Telecom shares.

At close, the Sensex was down 856.65 points or 1.14 percent at 74,454.41, and the Nifty was down 242.55 points or 1.06 percent at 22,553.35. Nifty Mid and Smallcap indices shed 1 percent each.

Amid weak global markets, the indices opened on a negative note and extended the losses to drag the Nifty 50 near 22,500. However, the trading session saw some recovery, led by auto, pharma, FMCG names.

Also Read: Broader market rout: Nifty Mid, Smallcap indices nosedive up to 2%

Biggest Nifty losers were Wipro, HCL Technologies, Infosys, TCS, Tata Steel, while gainers included M&M, Eicher Motors, Dr Reddy's Labs, Hero MotoCorp and Kotak Mahindra Bank.

Except auto, pharma, FMCG, all other sectoral indices ended in the red with IT, metal, telecom indices down 2 percent. Nifty IT index has now fallen for 11 out of last 12 sessions.

Nearly 280 stocks touched their 52-week low on the BSE, including AIA Engineering, Sanitaryware, Welspun Living, Ratnamani Metal, Fine Organics, Timken, Relaxo Footwear, Grindwell Norton, Cello World, Carborundum Universal, Mahindra Life, Star Health, Latent View, Tanla Platforms, Kajaria Ceramics, Sun Pharma Advanced, Apollo Tyres, Aether Industries, Bharat Forge, among others. Click here to view more

Outlook for February 25

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities

After showing a range bound action at the support of 22700 levels in the last few sessions, Nifty witnessed a downside breakout of the range on Monday and closed the day lower by 242 points. After opening with a downside gap, the market continued to drift down with range bound action in the early to mid part of the session. The choppy movement continued towards the end and Nifty closed near the day's lows.

A reasonable negative candle was formed on the daily chart with gap down opening and with minor upper shadow. Technically this market action signals a downside breakout of the support as well as the short-term range movement at 22700 levels. This is not a good sign.

The underlying trend of Nifty continues to be negative. There is a possibility of more weakness down to the next support of 22400 levels (20- month EMA) in the short term. Immediate resistance is placed at 22750 levels.

Aditya Gaggar Director of Progressive Shares

After an initial decline in the opening trade; Index fluctuated within the range before closing at 22,553.35 with a loss of 242.55 points. Among the sectors, FMCG, Auto, and Pharma managed to finish in the green, while IT and Metal sectors faced a correction of over 2%, emerging as the major laggards. Mid and Smallcaps more or less moved in tandem with the Frontline Index.

The Index, after several attempts, has now broken its strong support level of 22,800 on closing basis which will act as resistance going forward. A potential pullback rally toward the 22,800 mark can be anticipated, while immediate support is now seen at 22,400.

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