 "Bear, market")
Stock market updates on March 13: Investors turned poorer by Rs 13.5 trillion on Wednesday as bears prowled on Dalal Street, hammering equities. The benchmark S&P BSE Sensex and Nifty50 index fell over 1 per cent today, and the broader indices witnessed a fall of up to 5 per cent.
At the headline level, the BSE Sensex index tumbled 1,152 points during the day, before ending 906 points down at 72,762. The Nifty50 also breached the 22,000 level, hitting an intraday low of 21,906. It ended tad below 22,000 with a loss of 338 points. CHECK MARKET UPDATES
In the broader markets, the BSE SmallCap index plunged 5.1 per cent, and the BSE MidCap declined 4.5 per cent. In three days, the BSE m-cap has plunged by Rs 20.69 trillion.
“Investors should focus on the sustained weakness in the broader market, particularly the small-cap segment. The excessive valuations in these segments, driven by the irrational exuberance of retail investors, has been a concern for many months now. But it has taken the strong message from the regulator Sebi to trigger a correction. Persistent selling, along with actions from mutual funds, indicate there is more pain ahead,” said VK Vijayakumar, chief investment strategist, Geojit Financial Services.
Here are the top reasons for Wednesday’s market fall:
Selling in broader markets: Market regulator Securities and Exchange Board of India (Sebi) has been scrutinizing flows into mid, and small-cap stocks amid a massive rally in the segment over the past few years.
On Monday, Chairperson Madhabi Puri Buch said there are pockets of froth in the market.
“Some call it a bubble. It may not be appropriate to allow that bubble to keep growing because when it bursts, they impact investors adversely,” she said at an event. READ ABOUT IT HERE
She further said the regulator has observed signs of manipulation at both the trading and issuance levels in the small and midsize enterprise (SME) space.
On Tuesday, the National Stock Exchange Nifty Smallcap 100 Index slipped into ‘correction’ territory. A fall of 10 per cent or more from a recent high is termed ‘correction’. READ MORE
Declining close to 2 per cent for a second day, the Nifty Smallcap 100 hit an intraday low of 15,011, shedding 1,681 points, or 10.1 per cent, since logging an intraday peak of 16,692 on February 8. The index is still up 62 per cent in the past year.
Profit booking in large-caps: 25 of 30 Sensex stocks, and 43 of 50 Nifty stock were reeling under pressure on Wednesday. PowerGrid, and Coal India shed 7 per cent each; Adani Enterprises, and NTPC 6.8 per cent; Adani Ports 6.5 per cent; and Tata Steel 6 per cent.
That apart, ONGC, Titan, Hindalco, Bharti Airtel, L&T, Tata Consumer, Tata Motors, HUL, Hero MotoCorp, Axis Bank, IndusInd Bank, JSW Steel, Reliance Industries, Maruti Suzuki India, SBI, Bajaj Finserv, Wipro, TCS,Grasim, SBI Life, M&M, Divis Labs, and Bajaj Auto declined in the range of 1 per cent to 5 per cent.
Technical outlook: Nifty closed near 50-DMA of 21,997. If it slips below this, then 21,500 is the next support level, as per Pravesh Gour, senior technical analyst at Swastika Investmart.
"The market could be volatile for the week, with moves in both directions. 22,075 will be the immediate hurdle at bounce-back, while 22,180 is the next hurdle," he said.
As far as Bank Nifty is concerned, Gour added if it slips below this, then a 50-DMA at around 46,500 is immediate support and a 200-DMA of 46,000 is a key support level. 9-DMA of 47,450 will be an immediate hurdle, while 48,000 is the key hurdle.
"The market could be volatile for the week, with moves in both directions. 22,075 will be the immediate hurdle at bounce-back, while 22,180 is the next hurdle," he said.
As far as Bank Nifty is concerned, Gour added if it slips below this, then a 50-DMA at around 46,500 is immediate support and a 200-DMA of 46,000 is a key support level. 9-DMA of 47,450 will be an immediate hurdle, while 48,000 is the key hurdle.
