Stock market today: Bloodbath today as Sensex drops over 1,400 points, Nifty opens 2% down in early trade

Both Sensex and Nifty saw bloodbath as they opened for trade on Monday. While Sensex fell over 1,600 points down to slip below 80,000 mark and trade at 79,356.10, Nifty was also down by over 2% to trade at 24,213.20 points as of 9:30 am today.

Britannia (up by 2%), Sun Pharma and Hindustan Unilever gained early edge during trade, while Hindalco, Shri Ram Finance, Tata Motors, Tata Steel, ONGC and Maruti dipped by over 4% during trade today.

With the exception of India VIX, which inched up by a staggering 16.56%, all other indices opened in red. Most small cap and mid cap indices dipped by over 2%, while Nifty micro cap was down by about 3.15%. All sectoral indices also saw bloodbath, with realty dipping the most at 4.66%, followed by metals and consumer durables, which fell by over 3%.

Aditya Gaggar, director of Progressive Shares explained that a correction is imminent, since with a cut of over 1%, Nifty50 ended the trade on 2nd August at a lower level of 24,718. On the daily chart, a bearish divergence was spotted in the RSI, defining a trend reversal. The immediate support is placed at 24,550, but as per GIFT Nifty's indication, it will get violated in the opening trade only, and the next important support is 24,200 while on the higher side, 24,800 will be a crucial hurdle.

"BankNifty is likely to retest its previous support level of 50,450 and on the higher side, a level of 51,300 will be considered as immediate resistance. Barring energy and pharma, all other sectors are giving a sign of a correction. Broader markets are also indicating a temporary pause in their uptrend by forming a negative candle which is coupled with a bearish divergence. Even though the market will correct, Investors should refrain from buying extremely overbought segments (such as auto, defence, shipbuilding, and select capital good stocks)", continued Gaggar.

Shrikant Chouhan, Head Equity Research, Kotak Securities noted that last week, Nifty fell by 0.40%, while Sensex was down by 300 points. Realty, Auto, and IT fell by over 2% weekly, while the Nifty Pharma index was up nominally. We saw particular buying interest in new-age companies after Zomato's Q1 numbers.

"On an immediate basis, the market is finding support between 24,600/80,900 and 24,500/80,600 levels. On the other hand, until the market crosses 25,100/82,200, we may see a range-bound movement in the market. The strategy should be to buy selective stocks between 24,600 and 24,500/80,900 and 80,600 levels. A close below 24,500/80,600 may take the market towards 24,250/79,900 or 24,100/79,500 levels. Any bounce towards 24,900-25,000/81,700-82,000 levels will be an opportunity to reduce long positions", explained Chouhan.