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An evening walk down D-St: Sensex, Nifty fall for 2nd day in a row; Yes Bank, Tata Motors crash

August 21
19:06 2019

Falling for the second consecutive day, benchmark indices Sensex and Nifty settled in the red on August 21, dragged by losses in shares of select heavyweights, including ITC, HDFC and Larsen & Toubro.

Barring some gains in the first half, sentiment remained sombre for the session. Sensex remained in the negative amid mixed global cues.

“The market is reeling under pressure as there is no positive trigger to lift the sentiment. Unless the government reveals its cards on economic stimulus and reforms, the sentiment will remain weak,” said Rusmik Oza, Senior VP and Head of Fundamental Research at Kotak Securities.

The Sensex closed 268 points, or 0.72 percent, lower at 37,060.37, with 22 stocks in the red. The Nifty50 closed 98 points, or 0.89 percent, down at 10,918.70. Among the 50 stocks in the index, 39 incurred losses.

Tata Motors emerged as the top loser in the Sensex pack, falling 9.29 percent. It was followed by Yes Bank (down 8.21 percent), Tata Steel (down 4.26 percent) and ONGC (down 3.12 percent).

Hero MotoCorp, on the other hand, led the pack of gainers in Sensex, climbing 1.78 percent. Infosys, Tech Mahindra and Hindustan Unilever also featured among gainers, rising almost 1 percent.

In the broader markets, Midcap and Smallcap indices underperformed, falling 1.32 percent and 1.43 percent, respectively.

Barring IT, all sectoral indices fell on BSE, with metal, industrials, capital goods and basic materials closing with a cut of over 2 percent.

Stocks in news:

Shares of Yes Bank closed 8.21 percent lower at Rs 65.40 on BSE, after hitting their fresh 52-week low of Rs 64.50, following worries over the valuation of stake in Gautam Thapar’s CG Power, which has been hit by allegations of financial irregularities.

Shares of CG Power and Industrial Solutions plunged 20 percent to hit their fresh all-time low of Rs 11.80 on the BSE. As per media reports, the Ministry of Corporate Affairs (MCA) has ordered an inspection into the affairs of the company after reports of financial wrongdoings came to the light.

Shares of Housing Development and Infrastructure (HDIL) touched its 52-week low of Rs 8.78, falling 20 percent, after NCLT admitted the company under the Insolvency Bankruptcy Code, 2016 (IBC).

Shares of Dr Reddy’s Laboratories fell 2.02 percent to close the day at Rs 2,503.40 after the company was issued Form 483 with eight observations by the USFDA in relation to its Duvvada facility in Andhra Pradesh.

Shares of Sun Pharma Advanced Research Company declined 2.76 percent to Rs 149.95 after a US firm filed a complaint against the company in the US District Court.

Shares of NMDC settled at Rs 86.25 apiece, down 4.33 percent, after Karnataka government withdrew the approval to extend the mining lease.

Global update:

European stocks opened higher on hopes of monetary and fiscal stimulus. Traders are waiting for the Federal Reserve’s annual JacksonHole symposium later this week and a Group of Seven summit this weekend for clues on what steps policymakers will take to boost economic growth, Reuters reported.

Asian markets ended mixed on August 21 on the back of fall in the US indices overnight on recession fears. Nikkei shed 0.28 percent at 20,618.57, Kospi was up 0.22 percent at 1,964.65 and Shanghai Composite ended flat at 2,880.33.

Technical outlook:

Nifty formed a bearish candle for the third consecutive day. However, the index still managed to close above 10,900, hinting at the possibility that it can be in the range of 10,900-11,200 for some more sessions if it manages to hold above 10,900.

“Any decisive break below 10,900 can see sharp cuts towards 10,800. Immediate support for nifty is coming near 11,865-10,800 and resistance is near 10,980-11,040. Immediate support for Nifty Bank is coming near 27,580-27,400 while resistance is near 27,900-28,100,” said Rohit Singre, Senior Technical Analyst, LKP Securities.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.

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