Domestic markets are likely to see a gap down opening on Wednesday with global sentiment continuously haunt investors. SGX Nifty at 16,870 indicates that Nifty could see a gap down opening of about 150 points. With F&O monthly settlement on Thursday and the RBI monetary policy meet on Friday, analysts expect the market to remain volatile.

Analysts said there is no respite coming from the US markets, as they continue to decline despite witnessing a sharp slide. Amid global gloom, foreign portfolio investors are relentless in selling in the last few days.

FPI selling

Ruchit Jain, Lead Research, 5paisa.com, said FII’s have formed more short positions in the index futures segment and have been selling in the cash segment too. "Until we see any reversal in the above data, the equities will continue to witness selling pressure and this decline from the high of 18,100 seems to be an impulsive decline which is not completed yet. So the short term trend continues to be negative and hence, we continue with our advice for traders to stay cautious from a short term perspective," he added.

Asian-Pacific stocks are in a sea of red, with Korea’s Kospi suffering the most by falling nearly 2.75 per cent; others fell in the range of 0.8 per cent and 2.25 per cent.

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However, domestic markets may witness some consolidation or pause after the recent decline, said analysts. Mixed trends across sectors would continue to offer trading opportunities across the board, said Ajit Mishra, VP, Research, Religare Broking Ltd.

"Besides, the beginning of the MPC meet and global cues would keep the volatility high. We feel it’s prudent to continue with the defensive pack for long trades until we see some stability," he added.

PR Sundar, market veteran, said in a tweet, “Markets usually bottom out after a big last leg of the fall. During Lehman & Covid falls, markets bottomed out after a down circuit. Hope that does not happen now. All India Growth Story fizzled out now, Nifty is at 15,200 now in dollar terms, as Rupee depreciated by about 10 per cent.”

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