Market erases all gains since Budget, close at 2-month lows. Here's how experts see markets trading on Friday

Indian benchmark equity indices, Sensex and Nifty ended sharply lower Thursday dragged by heavy selling across the board on the F&O expiry day and lost over one and a half percent.

The March 2021 series turned out to be the worst since March 2020 in absolute terms and Sensex, Nifty & Nifty Bank post the biggest series fall in a year.

Among sectors, except for IT & FMCG, all sectoral indices give negative returns in March series.

Coal India, GAIL, ONGC, Hero Moto, Tata Motors top Nifty losers in March series while Grasim, Infosys, UltraTech Cement, JSW Steel, HCL were the top Nifty gainers in this series.

As for today’s fall, the market erased all the gains since budget, closed at nearly 2-mth lows; Sensex, Nifty & Midcap Index fell 2% each, Nifty Bank fell 1%.

BSE Companies erased market cap of more than Rs 4 lakh cr today.

The Sensex plunged 740 points, or 1.51% to 48,440, while the Nifty ended 224 points, or 1.5% lower at 14,324. Broader markets also fell for the day with the midcap and smallcap indices down over 2% each.

Here is how experts see markets trading on Friday

Shrikant Chouhan, EVP, Equity Technical Research at Kotak Securities:

With the financial year ending, Thursday’s March 2021 F&O expiry was expected to be volatile. If the Nifty/Sensex would have closed below the 14,250/48,200 levels, the market would have fallen further near to its big support of 14,000/47,500.

Overall, the Nifty/Sensex is poised to move closer to 14,500/50,200 and 14,700/50,600 levels.

A buying position should be created in the market with a stop loss at 14,250/48,200.

Even on Thursday all the sectors closed in negative territory. However, there was a good recovery in bank stocks. The metal stocks also shined once again. The focus should be on bank stocks as they have fallen to their crucial supports.

Manish Shah, Founder, Niftytrigers.com 

Nifty closed the day sharply lower as selling intensified. If Nifty trades below 14,300 we can expect a further drop towards 14,018 and below that to pre-budget low of 13,695.

The 14-period RSI is at 40 and in a bull market any reading below 40 is considered oversold. This means that momentum is oversold but we still need price action to confirm if there is buying interest coming in the market. MACD signal line is below zero for a couple of days and this means that the trend in down.
Any pull back in the market are likely to be short-lived as Nifty will continue to decline till we see signs of a major reversal.

If Nifty hold below 14,250 there should be a decline towards 13,960 and below that to 13,800. Next week we only have three trading days and with long week end coming in there would be reluctance on part of participants to carry forward trades. So for longer term traders it is wait and watch till the time Nifty shows signs of a reversal.

The trend on the higher degree time frame is bullish and we have to wait for selling to subside to catch the next impulsive move.