Tracking weak closing on Wall Street most of the Asian markets started trading in a deep red which trickled down to Indian markets as well

Indian market witnessed selling pressure on March 25 which pushed the S&P BSE Sensex below 38,000 while the Nifty50 also broke below its crucial psychological support at 11,400 levels during the day.

Zee Entertainment, Vedanta, Bharti Infratel, JSW Steel and UPL were among top losers on the Nifty, while gainers include IOC, ONGC, Coal India, HPCL and Power Grid Corp.

Tracking weak closing on Wall Street most of the Asian markets ended in a deep red which trickled down to Indian markets as well. Nikkei fell the most as index shed 3 percent to end at 20,977.11, while Shanghai composite slipped nearly 2 percent to 3,043.03

On Friday, all three major US stock indexes registered their biggest one-day percentage losses since Jan 3 with the Dow sliding 1.8 percent, the S&P 500 off 1.9 percent and the Nasdaq dropping 2.5 percent.

Recession fear looms:

Concerns about the health of the world economy heightened last week after cautious remarks by the US Federal Reserve sent 10-year treasury yields to the lowest since early 2018, said a Reuters report.

A weaker-than-expected reading of US factory activity in March, along with similarly dour reports from Europe and Japan, helped send US Treasury yields into an inversion with the spread between yields of three-month Treasury bills exceeding those of 10-year notes for the first time since 2007, it said.

“The US stock market tumbled on Friday as investors digested an ominous warning sign. Interest rates on long-term government debt fell below the rate on short-term bills. That’s often a signal that a recession is on the horizon,” Shrikant Chouhan, senior VP (Technical Research), Kotak Securities told Moneycontrol.

Profit Taking:

It looks like traders are booking profit at higher levels. After rallying for 7 consecutive sessions last week from March 11th to March 19th, Nifty witnessed selling pressure around 11500-11600 levels. For the week, the index rose just about 0.26 percent.

Reversal seen in BankNifty:

Strong rally seen in the NiftyBank was one of the contributing factors which pulled Nifty as well as Sensex above crucial resistance levels. However, there are some signs of tiredness at higher levels. But, experts feel that investors should use dips to create long positions.

Technical Factors:

The Nifty50 index extended gains towards 11572 mark on Friday but it failed to hold the same and drifted towards 11450 zones. It negated its formation of higher lows after eight trading sessions which implies that some pause in positive momentum is visible at higher levels.

source: moneycontrol.com