Sensex fell 712.74 points and Nifty dropped to 22,562.85 on October 28. Markets opened lower as rising crude prices and selling in IT shares hit investor sentiment. Analysts said, "After the recent pressure, the 22,500 level will be an important support to watch." Many sectors saw losses during the morning trade.
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Benchmark indices Sensex and Nifty saw a gap-down opening on October 28 by declining up to 0.9% lower due to various reasons, including rising crude prices.
At 9:20 am, the Sensex was down 712.74 points or 0.97% at 72,885.93, and the Nifty was down 186.90 points or 0.82% at 22,562.85. About 1,100 shares advanced, 1,540 shares declined, and 145 shares were unchanged.
Thirteen of the 16 major sectors logged losses.
Key factors behind market decline
1) Rising crude prices
Oil prices climbed 1.6% to $115.7 a barrel after an attack on a refinery in top exporter Saudi Arabia renewed concerns about energy supply disruptions and inflation.
2) FOMC decision awaited
While the Fed is widely expected to leave interest rates unchanged later in the day, its commentary on mounting price pressures from higher oil prices and the future path of monetary policy will be crucial for global markets.
3) Technical reason
Nifty needs to trade above 22,700 for bullishness to return to the market, said analysts.
"Failure to move above 22,830 will signal extension of the last three sessions consolidation in the range of 22,370-22,830. Within the consolidation immediate support is placed at 22,500-22,630 being the confluence of Tuesday low and retracement of last two sessions pullback," said Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking.
"After the recent pressure, the 22,500 level will be an important support to watch, while 22,700–22,800 is likely to act as the immediate resistance zone. The market remains under pressure, and a sell-on-rise approach looks preferable until Nifty shows a sustained recovery above resistance. However, after a sharp gap-down, traders should avoid chasing fresh shorts at the opening and watch how the index reacts around support. A decisive break below 22,500 could trigger further weakness, while a recovery towards 22,700–22,800 may attract selling pressure. The focus will remain on whether Nifty can hold the 22,500 zone or whether selling intensifies further," said Gaurav Udani, Founder, Thincredblu Securities.
4) Selling in IT shares
IT stocks, which earn a significant share of their revenue from the US, dropped 2.3%, leading the sectoral losses. with Infosys, HCL Tech leading the losses by falling 4.6% and 3.2%, respectively.