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Taking Stock: Sensex drops 1,200 points on weak global cues; Nifty below 8,300

April 01
18:06 2020

A selloff in world markets, weak global cues, spiralling coronavirus cases and MSCI deferring changes to the Foreign Inclusion Factors to May weighed on sentiment on April 1, with the Sensex plunging more than 1,200 points and the Nifty50 closing below 8,300.

The final tally on D-Street: the Sensex fell 1,203 points to 28,265 while the Nifty50 closed 343 points lower at 8,253. The Indian market will remain shut on April 2 on account of a public holiday.

Sectorally, the fall was led by losses in IT, banks, telecom, FMCG, public sector, and capital goods stocks.

Broader markets were better off. The S&P BSE Midcap index fell 2.1 percent while the S&P BSE Smallcap index was down by just 1 percent.

Experts are of the view that the recent selling is largely on the back of institutional offloading of stake in an attempt to raise cash. Investors should tread with caution as volatility is likely to remain.

”The Sensex took a knock of 1,200 points today as FIIs pulled out a staggering Rs 62,000 crore during March from Indian Equities,” S Ranganathan, Head of Research at LKP Securities told Moneycontrol.

“Today’s trade witnessed sustained selling across pivotal led primarily by technology and private sector banks as foreign wealth funds created cash by selling equities.”

Top Nifty gainers include Titan Company, Bajaj Auto, and Hero MotoCorp.

Top Nifty losers include UPL, TCS, Kotak Bank, and Tech Mahindra, which fell more than 6 percent each.

Stocks & Sectors

Sectorally, the selling pressure was evident in the BSE IT index that was down 5.5 percent, followed by the Bankex that fell 5.3 percent, and the BSE Telecom index was down 4.09 percent.

Volume spike of 100-400% was seen in Tata Chemicals, YES Bank, NIIT Tech, Kotak Bank, TVS Motor, and Bosch.

Long buildup was seen in stocks like Balkrishna Industries, IGL and Biocon.

Short buildup was seen in stocks like JSPL, Cummins India, Bosch and MRF.

More than 250 stocks on the BSE hit a fresh 52-week low that includes names like Eicher Motors, PVR, Oberoi Realty, and TVS Motor Company.

Stocks in news

Maruti Suzuki: The S&P BSE Auto index was down 1.5 percent, led by losses in TVS Motor, MRF, Cummins India, Tata Motors, M&M, Maruti Suzuki. Maruti Suzuki India Ltd reported a 47 percent fall in overall sales for the month of March.

Yes Bank: The share gained 6 percent after reports said that the private lender had raised Rs 3,500 crore from public sector banks.

Biocon: Biocon share price rose over 2 percent 1 after the company received an establishment inspection report (EIR) for its Malaysia facility.

Oil & gas stocks: Oil & gas stocks fell after bigger-than-expected rise in US inventories and a widening rift within OPEC heightened oversupply fears. BPCL, HCPL, IOC, ONGC and Reliance Industries shed 2-3 percent each.

Delta Corp: Shares of Delta Corp jumped almost 5 percent, a day after Radhakishan Damani bought 15,50,000 shares in the company at Rs 65.25 each from Derive Investments.

Bank stocks fall: Banking names tumbled with investors fearing that the lockdown triggered by coronavirus would have a serious impact on businesses across sectors, resulting in an increase in bad loans. Kotak Mahindra Bank was down over 8 percent followed by Punjab National Bank, State Bank of India and Axis Bank.

Technical View

The Nifty formed a Bearish Belt Hold pattern on charts.

The day’s can be regarded as profit-booking ahead of a market holiday.

The Nifty is retracing only recent leg of rally from the lows of 7511 – 9038 levels

The present dip can be an opportunity to go long. However, a close below 7,800 will negate bullish assumptions, which will force a neutral stance on the index once again, Mazhar Mohammad of Chartviewindia.in said.

Strength in the index would resume on a close above 8,680 with bigger targets.

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