Why did the correction in the Nifty and Sensex get so sharp on March 30? What are the technical levels to watch out now?

On 30 March, Indian shares saw another big selloff with Sensex and Nifty falling nearly 5%. The Sensex lost over 1375 points and closed at 28,440 while the Nifty 50 index closed at 8,281. Market sentiments took a hit due to the weak US markets on Friday and the expanding Coronavirus threat in India as the afflicted numbers in India crossed 1000. Most heavyweight private banks like HDFC Bank, ICICI Bank and Kotak Bank slumped 7% to 8% while financials like HDFC and Bajaj Finance plunged 11% to 12% despite the 75 bps rate cut. The immediate worry for the markets is the huge credit downgrade across global markets that EIU has announced for each of the major markets with most of Europe and North America going into negative growth in the calendar year 2020.

Technically, it may be hard to pin point levels as the VIX is too high and the markets too volatile. However, any breach of 8200 levels could lead the Nifty down to 7800 levels. For now the low of 7610 made last week should act as a support but if that gets taken out with volumes, then we could get into proper bear market territory in India.