The GIFT Nifty, which is an early indicator of how Indian equity markets are likely to begin trading, is currently down 200 points, indicating a gap-down start for India’s benchmark indices Sensex and the Nifty 50.The Nifty 50 index had begun this truncated trading week on a positive note but sold-off towards the later half of the trading session to end at the lowest point of the day, very close to the 22,450 mark, a level it has been defending over the last two trading sessions.
With the way the GIFT Nifty is positioned, the Nifty is likely to start well below that level and maybe close to another erstwhile support level of 22,250.
The overnight sell-off on Wall Street is a key trigger behind the potential gap-down beginning for our markets. The Dow Jones fell 900 points and also closed below its 200-Day Moving Average. The S&P 500 is now nearing “correction territory”, having declined 8.6% from its recent peak.
“The index is once again precariously placed with 22,000 zone as the important and crucial support on the downside,” said Vaishali Parekh of Prabhudas Lilladher. A move past 22,700 is necessary to improve the bias and only a decisive breach above 23,000 will establish conviction, she added.
