Domestic equity benchmarks gave up early gains, with the BSE Sensex dropping over 200 points and the NSE Nifty slipping below the 11,900 mark in afternoon session tracking losses in power, metal and financial stocks.
The market turned volatile as the government announced the portfolios for new cabinet ministers, traders said. Amit Shah has been named the new home minister, Rajnath Singh the new defence minister and Nirmala Sitharaman the new finance minister.
In an interview to CNBC-TV18, Dipan Mehta, director at Elixir Equities; Prakash Gaba of prakashgaba.com and Sudarshan Sukhani of s2analytics.com discussed the sudden fall in the market.
Mehta said, “Typically in the past when some sell-off comes like this, it is more to do with FIIs pressing sell. FIIs may be doing this through an algorithm or it could be a system driven orders. We are seeing selling more acute in the Nifty and the large-cap stocks where FIIs are holding more shares. So, according to me, there is no particular reason for the sell-off."
Gaba said, “Important thing to watch out is a double top. Because of the double top, some kind of basket selling happened here. If there was serious selling, then it should have happened on May 23, where we saw a swing of around 400 points. Even this swing is not a big swing, it is selling at the upper regions, but it stayed above very important support of 11,836. A close below 11,836 could be a problem. As long as that doesn’t happen, we must assume that these are wild swings."
Sukhani said, "I am watching the market with a lot of entertainment and enjoyment. This is probably either a fat-finger trade which has caused this decline or some very unusual index or basket selling, which was a very temporary phenomena. I don’t think there is any change in the trend of the market."Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.