Taking Stock: Volatile Thursday! Sensex, Nifty, Nifty Bank @3-yr low

Nifty formed a small bullish candle on the daily charts

What a day it has been for Indian markets. A ray of hope when Sensex turned green but bears hammered benchmark indices below their crucial support levels. The Nifty50 closed below 8,300 while the S&P BSE Sensex closed below 29,000.

The S&P BSE Sensex, Nifty50, and Nifty Bank hit a fresh 3-year low amid the volatility seen in markets. The Nifty Midcap index closed at a 4-year low while India VIX jumped to a 12-year high.

Let’s look at the final tally on D-Street – the S&P BSE Sensex dropped 581 points to 28,288 while the Nifty50 plunged 205 points to close at 8,263 on Thursday.

Benchmark indices witnessed some intraday recovery after Nifty hit a panic low of 7,832 while the Sensex bounced back from 27,714 levels.

Sectorally, selling pressure was seen in metals, capital goods, auto, energy, public sector, as well as, oil & gas stocks. Some respite was seen in the telecom space as the S&P BSE Telecom index closed in the green.

The Nifty Auto index hit a 6-year low, FMCG plunged to a 3-year low, while the metal Index at a 4-yr low. The Nifty Smallcap Index slipped 224 points to close at a 6-year low, said a CNBC-TV18 report.

On the broader markets front, the S&P BSE Midcap index was down 3.7 percent while the S&P BSE Smallcap index plunged 4.5 percent.

The Indian Rupee remains under tremendous pressure given the fallout of the Covid-19 pandemic. It breached Rs 75/USD mark in intraday trade on Thursday.

Strong stimulus measures initiated by ECB and US Fed failed to lift sentiment on D-Street. Foreign institutional investors continue to pull out money from Indian markets at a rapid pace. Experts feel that long term investors can look at quality stocks on declines.

“After another volatile session of trade, in which the Nifty fell below the 8000 mark, the benchmark indices closed down by around 2.4 percent. The market failed to take early cues from the positive opening in the European markets after ECB rolled out another stimulus package,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“With Worries about a case of community spread of the virus, investors fear further impact from Covid-19 and preferred cash instead of investments. All asset classes are seeing downward pressure,” he said.

Nair further added that FIIs have also been net sellers to the tune of Rs 40,000 crore this month, further putting pressure on the markets. However, pockets of value buying in quality stocks were seen during the session.

Stocks & Sectors:

Sectorally, the S&P BSE Metal index was down 7.1 percent, followed by the S&P BSE Capital Goods index which plunged 6.1 percent, and the S&P BSE Auto index was down 5.9 percent.

On the other side, the S&P BSE Telecom index was up 1.6 percent.

Volume spike of 100-200% was seen in stocks like Bajaj Auto, Bosch, NIIT Technologies, IGL, Maruti Suzuki, and Ashok Leyland.

Long Buildup was seen in stocks like Kotak Bank, Infosys, ITC among others.

Short Buildup was seen in stocks like Tata Power, Federal Bank, Tata Steel, and Century Textiles among others.

More than 1,000 stocks on the BSE hit a fresh 52-week low. These include Shree Cements, 3M India, Eicher Motors, Bosch, Bajaj Finserv, Maruti Suzuki UltraTech Cements, and Bajaj Finance among others. There are as many as 27 Nifty stocks which are at their 52-week low.

Stocks in news:

Ashok Leyland: Ashok Leyland share price fell 26 percent on March 19 hitting a 5-year low after the company approved the acquisition of up to 19 percent additional equity shares in Hinduja Leyland Finance from the existing shareholders in tranches.

Karur Vysya Bank: Karur Vysya Bank share price rose a percent on March 19 as the bank has entered into precious metals business.

Yes Bank: Yes Bank share price tanked almost 12 percent on March 19, a day after its largest promoter, Madhu Kapur, sold about 2.5 crore shares for Rs 161 crore at Rs 65 apiece.

IRCTC: Share price of IRCTC tanked 5 percent hitting lower circuit after Indian Railways cancelled 155 trains amid coronavirus.

Technical View:

Nifty formed a small bullish candle on the daily charts.

Nifty bounced back after breaching 7,900 in intraday trade. This can be an indication that the index is heading for a consolidation provided it sustains above 7,832 for at least next couple of days.

In case if the index breaches 7,832 then the slide can initially continue towards 7,548 levels.

If the index sustains above 7,832 levels then the next target would be 7,900 – 8,500 levels.

A sharp correction in bluechip counters from current levels shall be considered as an opportunity for long term investment.

Three levels: 7,700, 7,832, 8,575, 9,000

Source - Moneycontrol