InvestorQ : What is your trading and investment view for Nifty and Sensex for 07 July? Why did the market correct so sharply on Tuesday?
Dhwani Mehta made post

What is your trading and investment view for Nifty and Sensex for 07 July? Why did the market correct so sharply on Tuesday?

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diksha shah answered.
4 months ago
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The Nifty was strong through most of the day with the Nifty even scaling above the 15,950 mark briefly. However, it looks like the psychological level of 16,000 again played the trick and the Nifty closed around 15,815 on Tuesday. There was a lot of unwinding happening in stocks as well as in the futures market.

Cement stocks continued to do well on the back of good quarterly numbers and expectations of another robust quarter for Jun-21. However, auto stocks led by Tata Motors spoilt the sentiments of the market after JLR admitted that it could see negative cash flows and negative EBITDA margins due to chip shortage.

Foreign investors were net sellers worth Rs.543 crore on 06 Jul but the domestic institutions infused Rs.521 crore into equity markets on Tuesday. Meanwhile, the markets across the US and Europe were anywhere between 80 bps to 100 bps lower. Even the SGX Nifty is weak in early trades and that could rub off on the markets.

Regarding your query on the precise reason for the fall, I think that Tata Motors spoilt the sentiments in the market and led a lot of stocks lower. Not much has changed but clearly 16,000 on the Nifty is once again proving to be a resistance, which will be tough to scale although eventually it would be crossed over.

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