Markets have mostly been on a downward spiral since last week when the US Federal Reserve (US Fed) hiked rates by 75 basis points – the third such hike in 2022. The S&P BSE Sensex and the Nifty50 have tumbled over 1 percent each since then, and have turned negative in 2022 as regards the overall returns.
The selling, technical indicators suggest, has dragged 268 stocks (over half) that comprise the Nifty500 index below their respective 200-day moving average (DMA), a report by Business Standard stated. For long-term investors, the 200- DMA provides a broad outlook of the underlying trend in a stock or an index, it said, adding that traders prefer stocks that are above the 200-DMA, since they tend to perform better.
That said, the recent selling, analysts told BS has been overdone as investors pressed the panic button after the sharp rate hike by the US Fed hiked. The Indian markets, they said, are still a ‘buy on dips’ from a medium-to-long term perspective.
Among stocks, BPCL, Reliance Industries (RIL), Shree Cement, UltraTech Cement and UPL are among the 21 Nifty50 stocks that have slipped below their respective 200-DMA, noted BS. Meanwhile, HDFC, HDFC Bank, Jindal Steel & Power, Apollo Hospitals Enterprise, AU Small Finance Bank, Bank of Maharashtra, Suzlon Energy, Tata Communications, BASF India and PNB Housing Finance are some of the other Nifty500 stocks that are trading below their respective 200-DMA, it added.