The smallcap index falls by more than 7%, with more than 300 stocks falling by 10-31%

Following a strong start, the bears grabbed full control on Dalal Street, with the Indian benchmark indexes falling more than 2% in the week of December 23 as growing Covid cases put investors on edge.

The BSE Sensex down 1,492.52 points, or 2.43 percent, to 59,845.29, while the Nifty50 fell 462.2 points, or 2.52 percent, to 17,806.8.

For the time being, both benchmarks have lost 5% apiece in this month.

Among sectors, the Nifty PSU index fell more than 10%, the Nifty Media index fell 9%, the Nifty Realty index fell almost 7%, and the Nifty Metal index declined 6.4%. However, the Nifty Pharma index gained 1.5%.

This week, the BSE small-cap index sank 7.6%, the mid-cap index declined 5%, and the large-cap index fell 3%.

"This week, domestic equity markets corrected in response to bearish global indications. The Sensex 30 and Nifty 50 indices fell 2% this week, while the BSE midcap and NSE smallcap indices fell considerably more sharply. Due to market weakness, most sectors reported negative returns this week. The BSE Pharma index was the bright light, with good gains driven by the re-emergence of the covid worry "said Shrikant Chouhan, Kotak Securities' Head of Equity Research (Retail).

"Global markets remained turbulent as they reacted to a reported increase in Covid cases in China and solid US GDP statistics. Brent crude oil prices remain around $80 per barrel, while the US 10-year treasury rate has risen somewhat this week. In the short term, the Covid case count in China and concerns about a probable recession will continue to influence the global equities market," he added.

Foreign institutional investors (FIIs) continued to sell this week, offloading shares worth Rs 979.48 crore. Domestic institutional investors (DIIs) increased their purchases, purchasing securities worth Rs 8,545.06 crore.

So far this month, FIIs have sold shares worth Rs 8,469.53 crore while DIIs have purchased equities worth Rs 19,096.68 crore.

The BSE small-cap index fell 7.6 percent, with more than 300 firms falling by double digits. Lancer Containers Lines, Good Luck India, Andrew Yule and Company, Mahanagar Telephone Nigam, BCL Industries, Infibeam Avenues, Ramky Infrastructure, Taj GVK Hotels & Resorts, Deepak Fertilizers, National Fertilizers, Rashtriya Chemicals and Fertilisers, HLV, Punjab & Sind Bank, IFCI, Hindustan Foods, Central Bank of India, Ujjivan Financial Services, South Indian Bank, RSWM and SEPC lost between 20-31 per cent.

Morepen Laboratories, Syncom Formulations, IOL Chemicals and Pharmaceuticals, Nectar Lifesciences, JBM Auto, and Nureca, on the other hand, increased by 10-34 percent.

Where is the Nifty50 going?

Apurva Sheth, Samco Securities' Head of Market Perspectives

The Index's immediate support is located at 17,700 levels, followed by 17,400 levels, while resistance is capped at 18,200 levels. We'd sit on the sidelines and not commit to new longs just yet.

Jatin Gedia, Sharekhan by BNP Paribas Technical Research Analyst

On the weekly charts, the Nifty has touched the 20-week moving average (17839), which may bring some relief over the next week, but it is likely to be fleeting as the broader short-term trend has turned bearish.

On the downside, we predict the Nifty to fall until it reaches 17,560, the 61.82% fibonacci retracement level of the rally from 16,748 to 18,889. In terms of levels, critical support is located between 17,730 and 17,700, while immediate resistance is located between 17,930 and 18,000.

Siddhartha Khemka, Motilal Oswal Financial Services' Head of Retail Research

Going forward, we predict further decline in the equity due to concerns about the potential danger from increasing Covid and recessionary fears as central banks around the world stay hawkish.

We anticipate a reduction in areas such as entertainment, quick service restaurants, hotels, travel, and tourism as a result of the government's various preventative measures. However, any fall will provide an excellent opportunity to progressively accumulate fundamentally sound equities.

Amol Athawale, Kotak Securities' Deputy Vice President - Technical Research

Technically, the index closed below the 50-day SMA (Simple Moving Average) for the first time in a long time, and it also created a long bearish candle on weekly charts, which is widely unfavourable.

For traders, as long as the index is trading below 18,000, the correction wave is expected to continue, and if the index falls below that level, it might fall as low as 17,600-17,500. On the other hand, 18,000 may serve as a sacred resistance zone. The rejection of 18,000 might propel the index up to the 50-day SMA, or 18,150-18,200.