MUMBAI: Intensified selling pressure in rate sensitive sectors ahead of Reserve Bank of India’s policy meet pulled down indices below crucial support levels. Traders are likely to unwind long positions at these levels which may result in further downside, say analysts.

“Today's strategy depends more on the level 4980/16700. In case the market starts sustaining below the level 4980 then the liquidation of long positions may push the market to 4900/16450 levels with a minor support at 4950/16600.

However, our divergence count suggests us that the level 4900/4910 may act as powerful support in the short term and buying is advisable on "recoveries" from these levels with a short term prospects. In that case, we may expect jump of minimum up to 5035/40 (16870) levels. On the higher side, the market has several hurdles at 5035/5055/5075 and at 5095.

Sell Nifty if it remains below 4980 with a target 4910/4900 stop loss above 5020. In case the market reverses sharply from 4910 levels then the strategy should be of buying with a tight stop loss below 4880 and keep a target of 5035 on the higher side.

Before hitting the lower level 4980 in case the Nifty moves back 5055 levels then the strategy should be to short the Nifty around 5075/85 levels with a tight stop loss above 5100 level,” said Kotak Securities report.

At 12 pm, National Stock Exchange’s Nifty was at 4899.55, down 108.35 points or 2.11 per cent. The broader index touched a low of 4897.50 and high of 5008.50 in trade so far.

Bombay Stock Exchange’s Sensex was at 16455.68, down 324.78 points or 1.94 per cent. The index touched an intraday low of 16442.57 and high of 16708.60.

BSE Midcap Index was down 2 per cent and BSE Smallcap Index slipped 2.52 per cent.

Amongst the sectoral indices, rate sensitives led the decline ahead of Reserve Bank of India’s policy meet. BSE Realty Index was down 4.10 per cent, BSE Auto Index fell 4.03 per cent and BSE Metal Index slipped 3.86 per cent.

Mahindra & Mahindra (-6.80%), Tata Motors (-5.18%), Tata Steel (-4.94%), Hindalco (-4.65%) and Hero Honda (-4.65%) were the top Nifty losers.

Power Grid (1.21%), Suzlon Energy (1.05%), ITC (0.98%), Tata Power (0.24%) and TCS (0.05%) were the index gainers.