Market View | Ajit Mishra, SVP – Technical Research, Religare Broking, provided insights on the market performance on 13th March 2024. The markets plunged lower, losing approximately 1.5% after being in a narrow range for almost a week. The Nifty drifted gradually in the initial hours but saw an intensified decline as the day progressed, settling closer to the day’s low at 21,997.70 levels. The selling pressure was widespread, with sectors like metal, realty, and energy losing over 5% each. The broader indices also experienced losses in the range of 4%-5%.
The market reaction was primarily driven by concerns raised by the market regulator about the froth surrounding small, medium, and microcap valuations. The regulator also highlighted manipulations observed in the medium and small-cap segments. Larger AMCs are cautious and not accepting large lump-sum investments in that space. This has led investors to derisk their positions due to perceived risks emanating from these segments.
In light of these developments, experts suggest maintaining a negative bias in the index and utilizing rebounds to create short positions. Traders are advised not to add to their loss-making positions and to prefer index majors over others. The market is experiencing a correction due to concerns over valuations and potential manipulations, leading to a shift in investor sentiment towards larger caps. The situation is evolving, and market participants are closely monitoring the developments to make informed decisions.
