The Nifty index fell by 177 points or 1.53 per cent on Friday to close at 11,419. The Sensex was down 560 points, closing at 38,337. The fall in both these indices is in addition to the over 2.5 per cent fall they witnessed in two trading sessions immediately following the Union Budget on July 5. In contrast, gold hit another life-time high of ₹35,409 on Friday on the back of global cues.

“We all know some tax-related Budget proposals were not liked by foreign portfolio investors and they are selling. But the Street was expecting positive statements from the government or finance ministry post the budget that could have calmed the situation,” said Sunil Singhania, founder, Abakkus Asset Manager LLP.

Many small and mid-cap stocks have lost 50-70 per cent of their value and there still seems to be no interest in them due to economic slowdown fears and lack of incentives for equity markets.

“Looking forward, for an upside reversal, we would like to see Nifty retake its 100-DMA (day moving average), which has been its key support in the last few months and that, too, on the back of healthy market breadth,” a note from Willim O’Neil India, an equity research firm, said. DMA is a popular technical indicator in the markets that is used for analysis price trends. The 100 DMA for Nifty was 11,500, a level that it broke decisively on Friday to close at 11,419.

In Asia, markets in China, Japan and Hong Kong had closed with sharp gains of between 0.5 per cent and 1 per cent on Friday.

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