Sensex, Nifty fall as market bloodbath continues. 4 things investors should know

Stock market correction: Sensex and Nifty have entered a correction zone, marked by a drop of more than 10% from their recent highs. The sell-off has rattled retail investors, many of whom are now asking a pressing question: Has the market bottomed out, or is there more pain ahead?

In Short

• Sensex and Nifty see steepest correction phase in four years
• Foreign investors pull Rs 1.25 lakh crore since September
• Experts urge caution; avoid small-cap and speculative bets

Domestic stock markets continued their downward slide on Monday, with benchmark indices struggling to find footing amidst relentless selling pressure. The Sensex fell over 500 points during early trading, hovering just above 77,000, while the Nifty50 slipped below 23,400.

The broader market also faced significant declines, extending what has now become the steepest correction phase in four years.

For context, the Sensex and Nifty have entered a correction zone, marked by a drop of more than 10% from their recent highs.

The sell-off has rattled retail investors, many of whom are now asking a pressing question: Has the market bottomed out, or is there more pain ahead?

WHY ARE MARKETS FALLING?

The downturn can largely be attributed to multiple factors, including sustained selling by foreign portfolio investors (FPIs). November alone has seen FPIs withdraw Rs 29,533 crore, adding to total outflows of Rs 1.25 lakh crore since Nifty’s peak in September.

Rising US bond yields, weak corporate earnings, and global economic concerns have further dampened sentiment.

“Relentless FII selling, earnings downgrades, and the consequences of the Trump trade are weighing on the market,” says Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “Sentiments have turned negative, and investors should exercise caution at this stage.”

WHAT EXPERTS SAY

Sameet Chavan from Angel One points out that the markets are breaking key support levels with no significant interim recovery. “Despite oversold conditions hinting at a possible bounce, traders should remain cautious. The next support zone lies around 22,800–22,700,” he advises.

Anand James of Geojit Financial Services is also cautious, though he notes the potential for a short-term recovery. “Friday’s doji candlestick pattern and the RSI’s attempt to turn higher indicate a possible pullback. But challenges remain, and any recovery might face resistance at the 23,733–23,788 region.”

Meanwhile, Prashanth Tapse of Mehta Equities believes the market is vulnerable to further downside, especially with weak cues from Wall Street and rising bond yields. He advises selling on strength and avoiding speculative bets, particularly in small and mid-cap stocks.

SHOULD INVESTORS WORRY?

For retail investors, the current market scenario can be unsettling, but experts suggest maintaining a long-term perspective. Vijayakumar recommends focusing on sectors showing resilience, such as digital companies and high-quality banking stocks. “Large-caps like RIL and Eicher are holding their ground,” he adds.

Sameet Chavan cautions against bottom-fishing in small and mid-cap stocks, which have faced intense selling pressure. Instead, he suggests gradually accumulating quality stocks in well-established sectors once market conditions stabilise.

WHEN WILL STOCK MARKET BLOODBATH END?

Pinpointing the exact market bottom is difficult. While technical indicators hint at a potential bounce, global factors like rising bond yields and FII outflows suggest the recovery may take time. Investors are advised to stay patient, avoid panic selling, and focus on building a diversified portfolio with a long-term horizon.

As the markets navigate through this volatile phase, the key lies in staying informed and sticking to fundamental investment strategies. While the road ahead may appear uncertain, history shows that corrections often pave the way for future opportunities.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)