Stock Market Cracks as El Niño Threat Sparks Global Selloff

S Jha

5 days ago

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By S. JHA

Investors are reassessing the outlook for inflation, agriculture, and economic growth as concerns over El Niño intensify, adding a fresh layer of uncertainty to already fragile global markets.

Mumbai, June 23, 2026 — Indian markets crashed significantly on Tuesday in line with selloffs in Asia. Technically, Nifty is suggesting caution on the street. The selloff came on the back of the government finally admitting sharp El Niño impact on the progress of the Monsoon.

Nifty cracked by over 300 points. Sensex and Bank Nifty also went into deeper corrections. Hawkish tone of the US Fed added to the street fear stoked by El Niño impact on the Monsoon.

Union Minister for Agriculture and Farmers’ Welfare Shivraj Singh Chouhan on Tuesday admitted that the Monsoon is 43 percent deficit this year so far. The progress of the Monsoon is erratic.

“From a technical perspective, the Nifty50 witnessed a strong correction, slipping below its 50-DEMA and entering the bullish gap created during the recent uptrend. This development signals a cautious near-term outlook,” said Angel One in a market note shared with clients.

The brokerage firm further stated that “structurally, although the index had earlier registered a higher high, the ongoing corrective phase and the formation of the next significant low are likely to determine the market’s directional bias in the sessions ahead.”

“On the levels front, the 20 DEMA around 23750, followed by the bullish gap of 23640 is likely to be seen as potential support zone and is likely to cushion the fall in intermediate period. On the flip side, 24000 mark is likely to act as an immediate resistance, while 24100-24150 remains a key hurdle,” it added, while tracing the range of the 50-share index in the near short term.

Nifty also formed a small bodied DOJI suggesting indecision around higher levels. “The index had an disappointing weekly expiry session, as prices dropped significantly, eroding all the gains made over the course of last week,” added the brokerage.

Throughout the week, Bank Nifty traded within a range but maintained a positive bias, successfully defending the bullish gap formed on Monday. “Additionally, a Doji candlestick formation is visible on both the daily and weekly charts, indicating a phase of consolidation following the recent upmove,” noted the Delhi-based firm in its technical dissection of the chart of banking index.

Led by selling in PSUBANKS, Bank Nifty witnessed intense selling, resulting in formation of a bar that covered all the price action from last week, it added.

“Although Sensex ended the session on a negative note, buying interest emerged at lower levels near short-term support zones. The index formed a small red-bodied candle with a long lower wick, indicating that bulls continue to defend lower levels,” said Angel One in its note.