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Nifty Plunges 5% Amid Geopolitical Storm
14 Mar
Summary
- Indian indices experienced their third consecutive weekly decline.
- Nifty plunged over 5% weekly due to geopolitical tensions.
- Defensive sectors like FMCG and Pharma are recommended.
Indian equity benchmarks recorded their third successive weekly decline as geopolitical tensions between Iran, Israel, and the US negatively impacted market sentiment. The Nifty experienced a sharp weekly fall of over 5%, its most significant since June 2022, closing at 23,151.10. The Sensex also declined, settling at 74,563.92.
These market drops were driven by sharp corrections in metals, auto, and financial stocks. Volatility in crude oil prices, resuming an upward trajectory towards $100, and concerns over supply disruptions added to the uncertainty. Technically, the Nifty remains in a strong downtrend, having fallen over 12% in 27 trading sessions and closing below a crucial 61.8% Fibonacci retracement level.
The Bank Nifty underperformed, declining nearly 7% in a week and breaking down from its rising channel. Analyst Sudeep Shah from SBI Securities suggests that in this high-volatility environment, indicated by India VIX surging above 22, investors should consider defensive sectors like FMCG, Pharma, and CPSEs. Cyclical sectors like Auto and Financials are expected to lag.
Shah advised against immediate bottom-fishing, recommending that investors wait for clear stabilization signals. He highlighted key support at 22,850-22,800 for the Nifty and 53,400-53,200 for the Bank Nifty. Upside resistance is seen at 23,450-23,500 for the Nifty and 54,500-54,600 for the Bank Nifty.
