Domestic indices lost some of their early gains on Monday and lost more than 1% over the day. The Nifty 50 lost 277 points from its intraday high of 17,529.90 to trade at 17,252.25 while the BSE Sensex dropped 1000 points from its high of 59,510.92 to trade at 58,474.02. Continuing the downward trend, Bank Nifty slumped almost 900 points from the day’s high of 40,690.05 to close at 39,761.30.
Since Friday, when U.S.-based Silicon Valley Bank (SVB) shares dropped 60% after it announced a $1.75 billion capital raising to make up for a $1.8 billion loss from a forced sale of its securities portfolio, banking equities have been under pressure.
All the sectoral indices ended in the red with Nifty bank, Auto, and PSU Bank fell 2 percent each, while infra, metal, and information technology down 1 percent each. The midcap index shed 1.8 percent and smallcap index down by 2 percent.
In keeping with the global trend, markets had a weak start to the week, losing about 1.5 percent. Following the initial increase, the Nifty index progressively decreased during the day until settling at 17,154.30 levels. There was intense selling pressure, which resulted in large losses for the banking, car, and IT industries. The broader indices also fell substantially and each lost close to 2%.
The support area for the Nifty this month is estimated to be between 17200 and 17300. Further selling pressure might take Nifty in the coming months to levels of 17000 or 16800 if it is unable to sustain 17300. After a few days of consolidation, Bank Nifty started to decline. On the weekly chart, a bearish trend reversal is indicated by a heavy cloud cover pattern. The index may decline to a lower range of 39650–39500.