Indices log biggest 1-day fall in 9 mths; Sensex sinks 1,939 pts, holds 49K

Stock market updates: A steep hike in US treasury yields took the global markets by surprise on Friday as investors dumped equities for bonds. That apart, an air strike by the United States in Syria on Thursday, targeting facilities near the Iraqi border, further dented trading sentiment.

US Treasury yields vaulted to their highest levels, of about 1.5 per cent, since the outbreak of the coronavirus pandemic on expectations of a strong economic expansion and related inflation. Back home, the 10-year goverment bond firmed up to 6.23 per cent on Friday mirrowing similar trends. Effectively, fear of reversal in rate cut cycle, spooked investors who off-loaded equities worth Rs 5 trillion. 

Additionally, the US air strike in retaliation for a rocket attack in Iraq earlier this month, and caution ahead of the release of the gross domestic product (GDP) for the December quarter made investors sit on the fence.

In the intra-day trade, the benchmark S&P BSE Sensex tumbled 2,149 points while the Nifty50 index slumped 629 points. The indices ended near the lowest point of the day, at 49,100 and 14,529 levels, respectively, down 1,939 points and 568 points.

All the 30 constituents on the Sensex index and 50 stocks on the Nifty ended the day in the red. ONGC, JSW Steel, GAIL, M&M, Bajaj Finance, Grasim, and Hero MotoCorp were the top Nifty losers, down up to 8 per cent; Axis Bank, HDFC, Power Grid, ICICI Bank, and HDFC Bank were the top drags on the Sensex. 

In the broader markets, small-cap stocks held their ground relatively better as the S&P BSE SmallCap index settled only 0.7 per cent down. The S&P BSE MidCap index, on the the hand, ended 1.75 per cent lower.

On the sectoral front, banking counters got butchered as yield concerns soured sentiment in the sector. Expectations that banks may have to show yield-induced fall in G-sec value as losses, investors pushed the sell button for banks. The Nifty Bank, and Private bank indices closed 5 per cent down, followed by losses in the Nifty PSU Bank index, down 4.5 per cent.

The Nifty Metal and Auto indices dropped 3 per cent while the Nifty FMCG, IT, and Pharma indices slipped 2 per cent each.

Global markets

Global stocks fell on Friday, with Asian shares down by the most in nine months. MSCI's Emerging Markets equity index suffered its biggest daily drop in nearly 10 months and was 2.7 per cent lower, while European shares opened in the red, with the STOXX 600 down 0.7 per cent.

The MSCI world equity index, which tracks shares in 50 countries, was 0.9 per cent lower and was heading for its worst week in a month.

Asia saw the heaviest selling, with MSCI's broadest index of Asia-Pacific shares outside Japan sliding more than 3 per cent to a one-month low, its steepest one-day percentage loss since May 2020.

4:38 PM

TECH VIEW :: Nagaraj Shetti, Technical Research Analyst, HDFC Securities

Nifty on the weekly chart, formed a reasonable negative candle for the second consecutive week. The weakness after the formation of bearish engulfing type pattern of previous week. The medium term trend of the market remains intact and we observe a larger positive sequence like higher tops and bottoms in Nifty as per weekly timeframe chart. Present, weakness in the market could be in line with the new higher bottom of the sequence. But the higher bottom formation needs to be confirmed.

 

The weekly 10 period EMA has been offering support for the market since October 2020, as per weekly chart. In the last three occasions Nifty halted its weakness and showed sharp upside bounce from near this support  (in early Nov 20, Later Dec 20 and later Feb 21) or mildly violating the support. Presently, Nifty sliding down towards this support at 14345 and one may look for the opportunity of another upside bounce unfolding from the lows.

 

Conclusion: The recent upside bounce of the last two sessions has been negated sharply on Friday and the short term trend has turned down. One may expect further slide down towards the next crucial supports of around 14350-14300 levels in the coming few sessions, before showing any possibility of an upside bounce. Upside rise from here could find stiff resistance at 14640.

 

 

4:29 PM

MARKET CLOSING COMMENT :: Deepak Jasani, Head of Research, HDFC Securities

Indian benchmark equity indices declined the most since May last year as a sell-off in bond markets across the globe sparked a collapse in global equities. The Nifty opened gap down and kept falling through the day and closed almost at the intra day low. At close, the NSE Nifty 50 index shed 568 points to end 3.8% lower at 14,529. For the week, the Nifty closed 3.02% lower, falling for the second consecutive week.

 

Nifty opened with a downgap and hence has formed a bearish evening star formation on daily charts on Feb 26 as was expected by us on Feb 25. In the process, near term support of 14635 has been breached. Now the Nifty could head towards 14281-14336 band over the next few days with some intermittent bounces. Advance decline ratio keeps tracking the Nifty suggesting that the investors are taking action on the broader stocks based on the Nifty moves. 

4:14 PM

MARKET CLOSING COMMENT :: Vinod Nair, Head of Research at Geojit Financial Services

Domestic markets tumbled in line with global trend triggered by a sharp rise in bond yields. Increasing geopolitical tension between the US and Syria aggravated the selling. Q3 GDP data which is to be released today also added volatility in the Indian market. Although negative, mid and small caps outperformed their larger indices showing investor confidence.  The market will gain momentum as the global market is expected to stabilize supported by maintaining accommodative monetary policy and a growing economy

4:00 PM

MARKET CLOSING COMMENT :: Rusmik Oza, Executive Vice President, Head of Fundamental Research, Kotak Securities

What we are seeing in Indian markets is a knee jerk reaction to the rise in global bond yields. In the immediate future Indian markets could also bear the brunt of global correction but as time goes it could recoup and standout for three reasons: 1) India’s V shaped recovery could be stronger than other economies because of the severe lockdown we went through last year, 2) The low base caused due to last year’s lockdown will provide very high earnings growth for the next three quarters & 3) Since Pre-Covid India has added more than ~US$ 100 bn to its forex reserves. Due to the strong accumulation of reserves RBI could be in a better position to handle any currency weakness being caused by rising bond yields and potential FPI outflows. Stable currency, strong economy growth and sharp rise in earnings could help India sustain any global correction due to inflation and rising bond yields

3:48 PM

RailTel ends 21% higher against the issue price of Rs 94

3:46 PM

Index contributors ::HDFC twins, RIL, ICICI Bank weigh on Sensex

3:45 PM

Sectoral trends on NSE :: Banks, metals, auto worst hit

3:43 PM

Bloodbath on D-Street!

3:35 PM

CLOSING BELL

In the intra-day trade, the benchmark S&P BSE Sensex tumbled 2,149 points while the Nifty50 index slumped 629 points. The indices ended near the lowest point of the day, at 49,100 and 14,529 levels, respectively, down 1,939 points and 568 points.

 

All the 30 constituents on the Sensex index and 50 stocks on the Nifty ended the day in the red. ONGC, JSW Steel, GAIL, M&M, Bajaj Finance, Grasim, and Hero MotoCorp were the top Nifty losers, down up to 8 per cent; Axis Bank, HDFC, Power Grid, ICICI Bank, and HDFC Bank were the top drags on the Sensex. 

 

3:14 PM

MARKET ALERT

3:05 PM

Sensex Heatmap at this hour :: All 30 constituents trade in the red

2:57 PM

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2:51 PM

Airtel to seek shareholders' nod to issue 3.64 cr shares to LMIL for Bharti Telemedia deal

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(Text Source: PTI)

2:43 PM

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2:32 PM

MARKET VIEW | Hemang Jani, Head of Equity Strategy, Broking & Distribution, MOFSL

Equity markets opened gap down following spike in global bond yields and extended its weakness further as the session progressed. Panic in global bond markets led to sharp rise in yields which spooked investors amid fears of interest rate cycle reversal. Sensex tumbled 1800 points while Nifty tanked 500 points largely led by sharp fall in banking and financial stocks. Nifty Bank and Nifty Financials are down almost 5% against ~3.5% fall for Nifty. However the fall in the broader market is less severe with Nifty Midcap 100 and Nifty Small cap 100 down ~2%. India VIX has spiked 27% to 29 levels. Investors have thus turned to Pharma stocks amidst this market crash which is down just 0.4%. This sector has been in consolidation mode so far 2021YTD as it witnessed profit booking post sharp rally in CY20. It has also got boost from second PLI scheme being approved for the sector. The market correction might continue for some time till inflation fears ease down.