The Indian equity benchmarks moved sharply lower on Wednesday mirroring losses in other Asian markets as investor sentiment was spooked after risks of world economy entering global recession grew after Dow Jones entered the bear market territory, analysts said. The Sensex fell as much as 550 points and Nifty 50 index dropped below its important psychological level of 17,000 to hit an intraday low of 16,825. Asian shares tumbled Wednesday after a wobbly day ended with mixed results on Wall Street as markets churn over the prospect of a possible recession.
Tokyo’s Nikkei 225 index sank 2.2 per cent to 25,984.51 while the Kospi in Seoul lost 2.8 per cent to 2,161.86. In Sydney, the S&P/ASX 200 gave up 0.8 per cent to 6,443.30.
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Hong Kong’s Hang Seng dropped 2.1 per cent to 17,483.89 and the Shanghai Composite index declined 0.8 per cent to 3,068.
Overnight, stocks ended a wobbly day with mixed results on Wall Street as markets continue to be unstable amid worries about a possible recession.
The volatile trading came a day after the Dow Jones Industrial Average followed other major U.S. indexes into a bear market. The S&P 500 slipped 0.2 per cent, the Dow fell a bit more and the Nasdaq composite wound up with a gain of 0.2 per cent.
Back home, selling pressure was broad based as 13 of fifteen sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty PSU Bank index's 1.7 per cent fall. Nifty Private Bank, Bank, Metal, FMCG and Financial Services indices also fell between 1-15 per cent.
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"On technical grounds, Nifty has an immediate support at 16,920. Any move below the same may extend the fall toward 16,820-16,750 mark. On the flip side 17,100-17,180 will act as strong resistance levels," brokerage firm Nirmal Bang said in a report.
Broader markets were facing selling pressure but they were outperforming their larger peers as Nifty Midcap 100 index fell 0.6 per cent and Nifty Smallcap 100 index declined 0.7 per cent.
IndusInd Bank was top Nifty loser, the stock fell 2.33 per cent to Rs 1,138. ONGC, SBI Life, HDFC Life, HDFC, Reliance Industries, NTPC, HDFC Bank, ITC and Grasim Industries also fell between 1.4-2 per cent.
On the flipside, Power Grid was top Nifty gainer, the stock advanced 1.66 per cent to Rs 208 after its board on Tuesday said that its board has appointed its Director (Finance) G Ravisankar as Chief Financial Officer (CFO) with effect from Monday.
Dr Reddy's Labs, Sun Pharma, Tata Motors, Cipla, Apollo Hospitals, Mahindra & Mahindra and Eicher Motors were also among the gainers.
The overall market breadth was negative as 1,672 shares were declining while 1,091 were advancing on the BSE.
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