Selling pressure persists in broader mkts as Nifty, Sensex see minor losses

While the benchmark Nifty and the Sensex escaped with minor losses, the broader markets continued to reel under pressure. The Nifty Microcap 250 index fell 0.82 per cent, extending its loss from the peak to 27 per cent.

 

The market breadth was weak, with 2,852 stocks advancing and only 1,235 stocks declining on the BSE.

 

Meanwhile, 1,133 stocks hit 52-week lows.

 

The number of stocks hitting 52-week lows has been increasing over the past one week amid a sharp selloff in the market.

 

“Breadth measures for the broader NSE 500 are now downside-stretched. If one looks at the percentage of stocks above the 50, 100 and 200-day averages, the readings show 7.6 per cent, 6.2 per cent and 10.1 per cent respectively. We’d call them pretty low. At the depths of the Covid crash. i.e. these readings stood at 1.2 per cent, 4 per cent and 10.3 per cent respectively. The lesson here is rather simple, breadth measures can drop even more due to vertical plunges triggered by unexpected events,” said Akshay Chinchalkar, head of research and content, Axis Securities in a note.

 

In February, the advance-decline ratio was at 0.72 per cent, lowest in almost five years. The Nifty Smallcap 100 and Nifty Midcap 100 index fell 10.8 per cent and 13.1 per cent, respectively, their worst monthly showing since March 2020.

 

“Historical patterns suggest that extreme breadth readings often precede market bottoms, but investors should wait for confirmation of a recovery before taking positions,” he added.