With the start of trading today, heavy selling pressure was seen in the Indian stock market, due to which bears seem to be completely dominating on Dalal Street. Bombay Stock Exchange's main index Sensex has plunged by more than 400 points in the early hours of trading, causing panic among investors. The Nifty of the National Stock Exchange has also slipped below the red mark and selling is going on in all the major sectors of the market. The main reasons behind this sharp decline are considered to be weak signals from global markets, continuous selling by foreign institutional investors and profit-booking on the domestic front. This sudden change in the mood of the market has brought wrinkles on the faces of investors because the momentum which was being seen for the last few days has suddenly come to a halt.
The main reasons for the selling spree in the market and the huge fall in Sensex.
Ever since the beginning of today's trading session, sellers seem to be completely dominating and buyers are not able to muster the courage to hold on at any level. Due to Sensex falling by more than 400 points, lakhs of crores of rupees were lost in investors' wealth within a few moments. Experts say that the concerns regarding slowdown and inflation in major stock markets around the world have still not gone away completely, which is having a direct psychological impact on domestic investors. Apart from this, sharp fluctuations are also seen in the market due to the last expiry of the month and technical reasons. Analysts believe that unless the market receives a major positive trigger, this period of ups and downs and selling will continue to trouble investors from time to time.
There was strong selling and crashing prices in these big stocks including Axis Bank.
In today's trading session, banking and financial shares have been hit the most, where shares of many big companies including Axis Bank are seen under heavy pressure. Bank Nifty has also been badly affected by the sudden sharp fall in the shares of Axis Bank and investors have suffered a big blow. Apart from this, huge selling pressure is also being seen in major shares of metal, auto and IT sectors, due to which selected counters are on the verge of closing in the red. Those companies whose quarterly results were not as per expectations or whose valuations had concerns in the market, are witnessing maximum selling. The situation is quite confusing for retail investors as they are unable to understand how to protect their portfolio in this falling market.
Market condition from technical point of view and position of support levels
According to chart patterns and technical analysts, Sensex and Nifty are struggling around their important support levels, if these levels are broken then the scope of selling can go even deeper. At present, the market sentiment remains completely negative and investors are looking to recover their profits on every slight uptrend. In such an environment, there is a need to be extremely cautious before creating any new long position because one cannot predict which way the market will turn. Experts are advising that during such a decline, do not make the mistake of panicking and selling your best quality shares, but look for selective buying opportunities at the lower levels of the market.
What should be the future strategy for investors in this period of recession?
Such declines and fluctuations in the stock market are nothing new, as it is a natural part of the market which keeps testing investors from time to time. In this phase of bears taking over Dalal Street, long-term investors need to be patient the most. If you own shares of companies with strong fundamentals, there is no need to be afraid of these short-chart declines but should continue buying in SIPs or in chunks in a disciplined manner. Financial experts also suggest that you always keep your portfolio diversified so that the decline in any one sector does not affect your entire investment and you can create long term wealth safely.