Nifty, Sensex tank more than 1%; here’s what is dragging share market today

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Monday saw a decline in Indian equities markets due to negative global signals. While the NSE Nifty 50 index was down almost 200 points or 1.10% to linger above 17,550, the S&P BSE Sensex was down more than 600 points or 1.08% to lie just beyond 59,000.

The Bank Nifty fell by more than 1.5%, while the India VIX increased by 4% and crossed 19 levels. Analysts speculate that the rise in the dollar index and the US Fed's recent hawkish remarks may be to blame for today's profit taking.

Investors were alarmed by the minutes of the Reserve Bank of India's policy meeting, which also hinted at future interest rate increases.

"After a steep increase, profit booking is being seen on Indian equities markets. Weak global signals, coupled with a rise in the dollar index and aggressive US Fed comments, might be blamed for the profit-taking. According to Santosh Meena, Head of Research, Swastika Investmart Ltd.

the overall structure is still bullish where 17,500 is an immediate support area while 17350/17150/17000 are sacrosanct support levels

so traders and investors may buy the dip in a scattered manner in the range of 17500-17000." Technically, the Nifty slipped from the psychological hurdle of 18,000 as most momentum indicators were showing an overbought reading.

Following a sharp loss in US markets on Friday, benchmark indices continued to tumble on Monday, with the banking and information technology sectors leading the way, according to Rahul Goud, Research Analyst - Equity Research, CapitalVia Research.

The market's attitude is being affected by the rising dollar index, which has hit a fresh five-week high as a US Federal official indicated that rapid monetary tightening may continue. 

Additionally, growing inflation is a major issue for international markets. Before entering the market, we suggest traders to wait for a correction at the nifty 17,000 level," Goud said.

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