Sensex, Nifty fall for 6th straight day: What's hurting D-Street?
What's the story
India's benchmark equity indices, the Sensex and Nifty, have continued their losing streak for the sixth consecutive session. The Sensex fell by nearly 400 points to 83,182 while the Nifty slipped below the 25,560 mark in early trade on Monday. The downturn is largely attributed to weak investor sentiment amid domestic concerns and global uncertainties.
Investor caution
Market sentiment turns distinctly weak
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, has observed a distinctly weak market sentiment. He attributed this to a mix of India-specific issues and rising global geopolitical risks. The uncertainty surrounding the US-India trade deal as well as geopolitical developments in Venezuela and Iran are all contributing to investor caution.
Market volatility
India VIX indicates heightened volatility ahead
Vijayakumar also noted that these concerns have pushed up the India Volatility Index (India VIX), indicating a likely increase in market volatility. He highlighted uncertainty over a possible US Supreme Court ruling on Trump-era tariffs, which could emerge at any time and keep markets on edge. The near-term direction of the market will also depend on Q3 earnings and management commentary from IT majors, large banking stocks, and heavyweight companies such as Reliance Industries.
Trading strategy
Traders advised to remain selective and disciplined
Aakash Shah, Technical Research Analyst at Choice Equity Broking Private Limited, has advised traders to be selective and disciplined in their approach. Given the current market conditions, he recommends a range-bound approach where strong stocks are favored on declines. Traders should wait for clear breakouts before building aggressive positions. This strategy is aimed at navigating through the ongoing turbulent phase in D-Street effectively.