The broader market indices declined the most in Monday's (October 23) trade, with the Nifty Midcap 100 index slipping more than 800 points, below 39,000 to hit its lowest level for the first time since August 31. The decline was spooked by concerns about the long implication of geopolitical tensions in the Middle East and a weak start to the earnings season.

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At 3 pm, the Nifty Midcap 100 was trading at 38,988.25, down over 2%, or 890 points from its previous close. The Nifty Smallcap 100 also came under selling pressure, tumbling 3% or nearly 400 points to 12,535.15.

The Nifty Midcap index also posted its biggest single-day fall in two months. As many as 88 Nifty Midcap 100 stocks were trading in the red.

"The midcap index has been moving within a range for quite some time between the levels of 40900 and 39500 zone and recently, once again with profit booking happening, we have witnessed a slide from 40900 zone to shed gains and breached below the crucial 39500 zone, weakening the trend which is also where the significant 50EMA zone is positioned," said Shiju Koothupalakkal - Technical Research Analyst at Prabhudas Lilladher.

"With the bias turning weak one can anticipate for further slide in the coming days to see the near term targets towards 38400 and 37700 (200 period MA) levels," the analyst noted.

"Nifty midcap Select Index (NIFTYMIDSE) witnessed a breakdown of the triple top pattern with strong volume. The triple top pattern is a bearish reversal pattern that forms after an extended uptrend. It signifies a potential shift in market sentiment from bullish to bearish. The pattern consists of three consecutive peaks at approximately the same price level, with two minor pullbacks in between," said Pravesh Gour of Swastika Investmart.

In the last trading session, Gour said that the indices broke its 50-DMA and traded below 9000, which is a sign of a reversal. "However, 8800 is the last breakout level where it has retested. If it will be 8800 levels, then 8600 will be the next important support during any correction. While on the higher side, 9000 will act as an immediate hurdle."

The momentum indicator RSI (relative strength index) is also negatively poised, whereas MACD (moving average convergence divergence) is supporting the downtrend. This suggests that the indices may continue to fall in the near term, the analyst added.

Meanwhile, Sensex also breached 65,000-mark to end at its lowest closing level in four months, while the Nifty and the Midcap index closed at lowest closing levels in nearly two months.

Speaking to CNBC-TV18 today, Laurence Balanco of CLSA said that midcaps can underperform too; 36,000 is the level to enter midcaps.

He further said that the short-term support for Nifty is between 19,100-19,200, and there is no volume correction or sector rotation happening.

One of the biggest losing stocks in the midcap space was Laurus Labs, with the stock sliding about 11% to Rs 355.30 on the back of weak Q2 earnings. The pharma company posted a 84 percent year-on-year fall in its net profit for the July-September period, and this was also the third straight quarter the company saw its revenue shrink.

One of the bigger gainers today was Ipca Laboratories, which saw gains of almost 9%, after the pharmaceutical company said it received voluntary action indicated (VAI) classification from the United States Food and Drug Administration (USFDA) for its Ratlam, Madhya Pradesh manufacturing facility.

The stock of Ipca Lab surpassed its previous high of Rs 981.20 touched on October 18, 2023. It was quoting at its highest level since August 2022.

First Published:Oct 23, 2023 3:10 PM IST