Taking Stock: Manic Monday! Investors lose Rs 7.6 lakh cr; RBI says ready to act

In the next couple of trading sessions if the Nifty trades below 9,100 consistently, then it can revisit panic lows of 8,555.

Another Monday but the same old story. Tracking selloff in global markets, both the Sensex and the Nifty slipped below their crucial support levels on March 16.

The Nifty hit a fresh three-year low while the S&P BSE Sensex had its worst day in 30 months.

The S&P BSE Sensex broke below 32,000 and the Nifty closed below its crucial support at 9,300.

To calm investors’ nerves jangled by the market free fall and growing cases of coronavirus across the world, the Reserve Bank of India (RBI) said it planned to conduct another 6-month US dollar swaps on March 23.

The RBI will conduct LTRO in multiple tranches up to a total amount of Rs 1 lakh crore at the policy rate.

This will be followed by a review of performance of LTRO, Governor Shaktikanta Das said at a press conference that was held after trading hours.

The final tally on D-Street: the S&P BSE Sensex plunged 2,713 points to 31,390 while the Nifty closed with losses of 757 points at 9,197.

On March 16, investors lost Rs 7.6 lakh crore in a single trading session, making it the second-largest fall in the past week.

Investor wealth, according to average markets capitalisation of BSE-listed companies, fell from Rs 129.26 lakh crore on March 13 to Rs 121.63 lakh crore on March 16.

Sectorally, the selling pressure was seen in Metals, Banks, Finance, Realty, IT, and Energy, which were down more than 7 percent each.

The Nifty Bank slides to a 34-month low while the Nifty Midcap index dropped to a four-year low.

The broader markets were a shade better. The S&P BSE Midcap index was down 5.9 percent, while the S&P BSE Smallcap index closed with losses of 5.6 percent.

Experts say the market is showing no signs of stability as the economic impact of coronavirus is likely to be significant for many major economies.

A rate cut by the US Fed and the introduction of a $ 700-billion stimulus programme failed to revive investor sentiments. But given the possibility of an increase in the spread of the virus, the current choppiness could continue in the coming days.

"Easing monetary policy action from central banks across the globe highlights that the impact of coronavirus is worse than thought.

Economic, trade and travel shutdown are impacting equities across the globe,” Vinod Nair, Head of Research at Geojit Financial Services, told Moneycontrol.

“The RBI will join its global peers in announcing measures like rate cut and additional measures to improve liquidity and confidence."

Top Nifty losers include Axis Bank, HDFC, Vedanta, Tata Steel, JSW Steel and IndusInd Bank, which were down more than 10 percent each.

Yes Bank was the lone gainer, up 45 percent.

Stocks & Sectors

Sectorally, the S&P BSE Metal index plunged 9.3 percent followed by the S&P BSE Bankex, which fell 8.3 percent and the S&P BSE Realty index fell 8.2 percent. The Nifty Bank plunged 8.2 percent to 23,101.

Volume spike was seen in stocks like Tech Mahindra, PVR, Yes Bank and Shree Cement.

Short buildup was seen in stocks like HDFC Life, InterGlobe Aviation, Equitas Holding, Tech Mahindra, and SAIL.

There are nearly 600 stocks on the BSE which hit lower circuit. These include Avenue Supermarts, Affle India, IRCTC, Shilpa Medicare, Suven Pharma and IOL Chemicals.

More than 500 stocks on the BSE hit a fresh 52-week low. Among these are ICRA, TeamLease Services, PVR, Shriram City Union, Piramal Enterprises, SBI Card & Payment and UPL.

Stocks in news

SBI Cards: SBI Cards and Payment Services shares corrected 9.51 percent, as the bears gripped the stock amid coronavirus fears.

The stock settled at Rs 683.20 on the BSE compared to final issue price of Rs 755 per share.

YES Bank: The share price surged 45 percent after the government notified a rescue plan for the private sector lender led by State Bank of India and others.

Alembic Pharma: The share price fell 5 percent after the company received four observations from the US drug regulator.

SBI: The share fell 7 percent on fear as the listing of subsidiary SBI Cards and Payment Services took a hit due to the dampened market sentiment.

RBL Bank: Shares plunged over 21 percent on fears that it could be the next lender to face a crisis after Yes Bank. However, the bank, in a regulatory filing on March 11, has said it is financially strong, well capitalised, profitable and a growing entity with strong governance set up.

Technical View

The Nifty50 formed a bearish candle to daily charts.

In the next couple of sessions if the index trades below 9,100 consistently, then at some point it can revisit panic lows of 8,555.

In case it manages a sustainable close above 9,600, then a sideways consolidation can be expected in a wider 9,100–10,000 range.

Three levels: 8,555, 9,165, 9,600

Max Call OI: 12,000, 10,000

Max Put OI: 9,000, 9,500

Source - Moneycontrol