Sensex slips 500 points: What's behind today's decline?
What's the story
India's benchmark indices, the Sensex and Nifty, witnessed a sharp fall on Friday. The fall was mainly due to a US tech selloff and weak Asian cues. At the time of writing, the Sensex had lost 483 points to trade at 81,765 while Nifty fell to 25,309 after losing 187 points.
Market factors
Factors affecting Indian market
The decline in India's benchmark indices can be attributed to a number of factors. The S&P 500 and European equities ended lower as investors grappled with NVIDIA's strong quarterly performance but questioned its valuation despite a projected first-quarter revenue of $78 billion. Further, Foreign Institutional Investors (FIIs) sold ₹3,465.99 crore on Thursday, which further dented market sentiments.
Market volatility
VIX rises nearly 3%
Adding to the market's woes, India's Volatility Index (VIX) rose nearly 3% to 13.44, signaling heightened uncertainty among investors. Anand James, Chief Market Strategist at Geojit Investments, expressed disappointment over the repeated hits on key upside pivots but noted that a triangle formation has emerged due to a firm base holding up all these days.
Strategic perspective
Geojit Investments's outlook for market
James also shared his strategic outlook for the market, saying they will look for a break of 25,670 to confirm strength and aim for 25,900. He expects swings on either side of 25,530 but is waiting for a fall below 25,300 before switching sides. This suggests that while there may be short-term volatility in the market due to global factors and FII selling trends, there are still opportunities for strategic investment decisions based on technical indicators.