Investors Face Massive Losses as Sensex, Nifty Plunge on All-Round Sell-off

Mumbai: The Indian equity market saw a sharp decline on Wednesday, August 2, 2023, following the credit rating downgrade of the United States by Fitch Ratings. The US credit rating was downgraded from ‘AAA’ to ‘AA+’ with a ‘stable’ outlook. This downgrade rattled investor confidence globally, leading to losses in most Asian and European markets, as well as a drop in yields.

The selloff affected all sectoral indices, with the Nifty PSU Bank index and Nifty Metal index experiencing significant declines. Additional sectoral indices, including Nifty Bank, Private Banks, Financial Services, Auto, Realty, Oil & Gas, and Media, also faced losses of over 1% each.

Experts attributed the market slide to weak global trends, concerns about the US credit rating downgrade, and negative factory activity data from Eurozone and China. Prolonged foreign institutional investor (FII) selling, influenced by rising US bond yields, further impacted the domestic market sentiment.

Technical analysis indicated that the Nifty formed a long bearish candle after opening with a gap-down. This suggested that sellers were in control, and the index might find support around the 18,450 level. However, a sustainable rebound could occur if the index stays above the 19,300 level.

Market experts identified the immediate support zone for the Nifty at 19,450. A potential pullback rally could occur if the index surpasses this level, targeting 19,580-19,600. Conversely, fresh selling pressure might emerge if the index falls below 19,450, potentially leading to a decline toward 19,400-19,375.