- Nifty 50, the benchmark of the Indian stock market, fell almost 1 per cent on Wednesday, May 29, to end at 22,704.70, marking its fourth consecutive day of losses.
- The Nifty 50 hit a fresh all-time high of 23,110.80 in intraday trade on May 27 but failed to hold gains thereafter.
- “The index is currently down 1.8 per cent from its all-time high, thanks to Lok Sabha election-related nervousness, weak global cues, waning expectations of rate cuts, and significant foreign capital outflow.”
Nifty 50 tumbles amid election jitters and global uncertainties, with experts predicting further volatility.
Market Sentiment and Election-Related Nervousness
The Indian stock market is expected to remain volatile until the Lok Sabha election results on June 4. The Nifty 50’s recent downturn is attributed to election-related nervousness, weak global cues, and waning expectations of rate cuts. Additionally, significant foreign capital outflow has contributed to the index’s decline.
Technical Analysis and Expert Opinions
Deepak Jasani, Head of Retail Research at HDFC Securities, suggests that if the current downturn continues, the Nifty 50 could see the level of 22,520 before the exit poll results are out. Ruchit Jain, Lead Research at 5paisa.com, notes that the Nifty 50 has resisted near the trendline’s higher end, coinciding with the retracement hurdle. He also mentions that the market has rallied ahead of the event, and India VIX continues to inch higher, leading to nervousness and some profit booking.
Support and Resistance Levels
According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, the market is holding a lower top formation on intraday charts, indicating further weakness from the current levels. He identifies 22,800 as a trend decider level for day traders, with potential declines to 22,650-22,600 if the level is breached. On the flip side, surpassing 22,800 could lead to a technical bounce back to 22,900-22,950.
Conclusion
In summary, the Nifty 50 is experiencing a period of heightened volatility due to election-related uncertainties and global market conditions. Experts suggest that the index may face further declines but also highlight potential support levels that could stabilize the market. Investors are advised to adopt a cautious approach and consider expert opinions before making any investment decisions.
