Himachal Pradesh Chief Minister Jai Ram Thakur pays his last respects to martyr Tilak Raj, who was among the 49 CRPF personnel killed in a suicide attack by militants in Jammu and Kashmir's Pulwama district on 14th Feb 2019; in Jandro village of state's Kangra district on Feb 16, 2019.IANS

The Pulwama terror attack that took lives of 40 CRPF personnel echoed across the stock market on Monday with the Bombay Stock Exchange's headline index Sensex sinking below the psychologically important 36,000 points. National Stock Exchange's broader Nifty also dipped below the crucial 10,800 level.

Traders feel geopolitical aftershocks radiating out of Pulwama will add to the market's choppiness aggravated by the approaching general election 2019.

The general sectoral weakness evident from the previous week is expected to continue through the February 18-22 week, according to observers. For the week ended on February 15, the S&P BSE Smallcap index and the S&P BSE Midcap index dropped 2.96 per cent and 2.71 per cent, respectively, compared to S&P BSE Sensex and Nifty50 which fell by about 2 per cent each during the same period.

The indices are gravitating towards some crucial support levels with sustained selling pressure. Some experts feel that a technical bounce back could be on the cards if the supports are sustained. But if they are beached on the downside, the market could skid to lower levels entering the bearish territory. 

India has blamed Pakistan-based Masood Azhar-led Jaish-e-Mohammed (JeM) of having masterminded the attack.

"There is a palpable sense of nervousness in case the situation at the border continues to deteriorate, and this comes at a time when there is heightened sense of risk aversion among investors with respect to equities in the run-up to general elections," Moneycontrol website quoted Ajay Bodke of Prabhudas Lilladher told Moneycontrol as saying.

"The confluence of these two factors will keep investors on the edge, and hence, one needs to tread cautiously in the short term."

The Dalal Street is reflecting the spiralling tensions between the two nuclear-armed South Asian neighbours after Prime Minister Narendra Modi said those responsible will pay "a very heavy price" and the security forces would be given a free hand. New Delhi accuses Islamabad of sheltering and supporting terrorists involved in blasts on Indian soil.

Experts advocate extreme caution with a strict stop loss, though they see a pullback chance of the indices after six straight sessions of decline. Analysts recognised the 'evening star' formation by the end of the previous week, encouraging traders to take short positions. The situation pushed Nifty to a deeper correction.

A report on the website says citing Debabrata Bhattacharjee of the CapitalAim that though experts expected Nifty to sustain around 10,700 level in the short view, the Pulwama attack has set off extremely bearish sentiments amplified by hawkish comments from government leaders. He does not rule out the creation of more short positions driving the indices further down.

Traders think that if the crucial 10,600-10,500 support, which is multiday support that sustained the index since November 2018, fails, Nifty could dip to the next one at 10,200 in the short term.

The volatility index, India VIX, moved up by 5.72 per cent at 16.46 levels last week while the Put-Call Ratio fell from 1.59 to 1.30 levels indicating supply pressure at resistance zones.