From January Highs To Deep Sell-Off: What To Expect Next From Sensex & Nifty?

After India's benchmark stock market indices transitioned from the highs of January to volatility in March, Shrikant Chouhan, Head, Equity Research, Kotak Securities, noted that investors are likely to witness "bottoming out formation".

Ahead of the Middle East conflict and global oil and gas supply crunch, the market was somewhere close to "26,375, and has already seen falling to the levels of 22,275," triggered by deep sell-off experienced in a short span of time.

On whether the worst is ahead or over for Indian stock markets, he noted, "I am of the view that the market has fallen to its, we can say, extreme level in the near term. In last four years, if we consider the maximum drawdown, then it was close to 17-18%. And in this fall particularly, the market has fallen close to 15%."

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Further, he noted that stock market observers could expect some "bottoming out sort of formation, which can again lift the market towards the levels of 25,000, where the market has spent maximum time."

This comes after markets have spent over one and a half year within the range of 26,000 on the higher side and 23,000 on the downside.

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"So right now, if we consider the stock-specific performance of the market, then in that number of stocks have fallen more than 50%. And now all these large cap stocks have fallen in the last one month," he said.

On Wednesday's trading session, the stock market bourses closed in green amid heightened expectations linked to deescalation in the US-Iran war.

After Nifty50 has formed a consecutive DOJI candlestick pattern on the weekly chart in the previous week, signalling a reversal, Nifty closed 1.56% higher at 22,679.40 level, while the Sensex closed 1.65% higher at 73,134.32.