Indian markets opened with a sharp decline on Friday, driven by a strong sell-off in technology stocks and volatile global cues that ended a multi-day winning streak, experts said. The BSE Sensex dropped 557.12 points, or 0.72 per cent, to 76,852.86, while the NSE Nifty 50 fell 176.80 points, or 0.73 per cent, to 23,991.20 during the opening session.
Market Reversal After Five-Day Rally
The downturn followed five consecutive sessions of gains in domestic indices. Market indicators pointed to a cautious opening as regional Asian markets showed mixed trends. Japan's Nikkei 225 edged up 0.19 per cent, but Hong Kong's Hang Seng fell 1.62 per cent and South Korea's KOSPI dropped 0.86 per cent. The GIFT Nifty traded flat, up 2 points at 23,991.
Expert Analysis on Market Triggers
Banking and market expert Ajay Bagga attributed the correction to a sell-off in IT stocks and ADRs in futures trading. He noted that early morning adjustments cushioned some losses, with a recovery of nearly 100 points. Bagga added that banks should continue to lead Indian markets higher.
Commodity markets provided some relief, with Brent crude falling 0.88 per cent to USD 79.15 per barrel and crude oil down 0.72 per cent to USD 76.05. Gold prices also declined 1.18 per cent to USD 4,160.26. Bagga highlighted that India's crude oil basket fell to USD 78 on June 17, making oil marketing companies profitable on petrol and diesel sales.
Global Market Dynamics
Wall Street showed a different trend, with US futures marginally soft on Friday morning. Dow Jones Futures fell 0.20 per cent to 51,461.65, while the S&P 500 closed 1.08 per cent higher at 7,500.58 and the Nasdaq rose 1.91 per cent to 26,517.93. Bagga noted that US markets rallied as the Federal Reserve's hawkish stance was absorbed and an interim agreement was welcomed, with oil prices staying below USD 80.
Support Levels and Outlook
Shrikant Chouhan, Head of Equity Research at Kotak Securities, said that 24,000/77,000 are key support zones for trend-following traders. As long as the market stays above these levels, the uptrend may continue. On the upside, it could revisit 24,300-24,375/77,800-78,000. If it breaks below 24,000/77,000, it may decline towards 23,900-23,800/76,700-76,400. He recommended taking long positions between 24,100 and 24,000 with a stop loss at 23,900.
