How do you see the markets panning out on 23 November after the sharp crash on Monday?

It was almost like a Black Monday on 22 November but it could have been a lot worse for the markets. The markets bounced in the last half hour and that gave some semblance of sanity to the markets. However, the Nifty still closed 350 points lower and the Senex closed with losses of over 1,100 points. This is the sharpest fall in the markets in last 7 months.

In terms of specific stocks Reliance triggered the fall on Monday after it opted out of the deal to sell 15% stake in Reliance O2C to Saudi Aramco. This could be long term positive for RIL but the reaction was fairly knee-jerk for the markets. The other big loser of the day was Bajaj Finance which corrected more than 5% in a single day on Monday.

FPIs net sold Rs.3,439 crore of equities while domestic funds bought equities worth Rs.2,051 crore. FPI sentiments soured after macro risks were highlighted and the Paytm listing. In global markets, the Dow was up on Monday but the NASDAQ was lower. SGX Nifty is down nearly 50 bps in early trades and that is going to weigh on the markets.

While the advance decline ratio at 9:41 remains negative, the big concern was the 18% spike in the VIX in a single day to near the 18 levels. That opens up further downsides all the way to 17,000 for the Nifty with little support in between. It remains to be seen if there are any positive global cues for the market on Tuesday to alleviate the fall.