The stock market is bleeding and Both Sensex and Nifty had a rough start to trading on Monday. Sensex dropped more than 2500 points, falling below 80,000 to 77500. Nifty also fell over 2%, trading at 24,213.20 points as of 9:30 am. In this article know which stocks have gained.
Britannia, Sun Pharma, and Hindustan Unilever, ITC stocks saw early gains of around 2%, while Hindalco, Shri Ram Finance, Tata Motors, Tata Steel, and Maruti fell by over 3% during trading today.
Except for India VIX, which surged by 16.56%, all other indices opened lower. Most small-cap and mid-cap indices dropped by over 2%, with Nifty micro-cap falling about 3.15%. All sector indices also declined, with realty falling the most at 4.66%, followed by metals and consumer durables, which each dropped by over 3%.
Aditya Gaggar, director of Progressive Shares, said a correction is likely. Nifty50 ended trading on August 2 with a drop of over 1%, closing at 24,718. A bearish divergence on the daily chart signals a trend reversal. The immediate support level is at 24,550, but it may be broken right at the opening of trade. The next key support is 24,200, while 24,800 will be a major resistance level.
Gaggar noted that BankNifty is likely to test its previous support level of 50,450 again, with 51,300 acting as immediate resistance. All sectors except energy and pharma are showing signs of a correction. The broader markets are also showing a temporary slowdown with a negative candle and bearish divergence. Despite the market correction, investors should avoid buying highly overbought segments like auto, defense, shipbuilding, and certain capital goods stocks.
Know The Last Week’s Drop
Shrikant Chouhan, Head of Equity Research at Kotak Securities, said that last week Nifty dropped by 0.40% and Sensex fell by 300 points. Realty, auto, and IT sectors fell by more than 2% for the week, while the Nifty Pharma index saw a small increase. There was notable buying interest in new-age companies following Zomato’s Q1 results.
Reasons Why The Stock Market Is Falling
There are concerns that the US economy might be heading into a recession because the Sahm Recession Indicator has risen above the 0.5 mark, signaling a potential downturn. This worry comes as the US saw a significant slowdown in hiring in July, with only 114,000 jobs added compared to last year’s monthly average of 215,000. Unemployment in the US has also increased to about 4.3%, the highest level since October 2021.
Tensions in the Middle East have increased after Iran, Hamas, and Hezbollah pledged to retaliate against Israel’s killing of the Hamas chief and Hezbollah’s military leader. This escalation could lead to higher oil prices, which are currently at their lowest in eight months due to decreased demand.
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