Geopolitical tensions continued to weigh on sentiment as D-Street witnessed another day of sell-off despite positive global cues. The S&P BSE Sensex recovered from lows but closed below 36,000 as the Nifty50 managed to defend 10,800.
Pakistan’s benchmark stock exchange KSE (Karachi Stock Exchange) which was down nearly 4 percent intraday managed to recoup losses and was trading marginally in the green at the time of writing this article.
The way benchmark indices bounced back after testing lows suggest that the Street is confident that this is not a ‘war-like situation’ and investors should use dips to buy into quality stocks or average their cost price in stocks which are part of their portfolio, suggest experts.
“There was nervousness in both nations after the recent air strike on militant camps and so was in the stock market. The way we recovered from lows suggest that investors are not that nervous and both the days we saw buying at lower levels,” Yogesh Mehta, VP, retail research, Motilal Oswal Securities told .
“But, if there is a meaningful correction, investors could use the opportunity to gradually keep topping up their investments. But, just to clarify this is not a war-like situation between India and Pakistan. But, historically, in such situations, sectors such as IT, consumer staples, pharma and telecom witnessed tailwinds,” he added.
The market is likely to remain volatile ahead of February F&O expiry, GDP data as well as developments on geopolitical situation. India VIX rose 12.2 percent on February 27, the highest level seen in the past couple of days.
The S&P BSE Sensex closed 68 points lower at 35,905 and the Nifty50 ended 28 points down at 10,806. The broader markets outperformed with BSE Midcap and Smallcap ending with gains of 0.4 percent and 0.2 percent, respectively.
The sectoral indices witnessed a mixed trend. While capital goods, realty and auto ended with moderate gains, sectors like consumer durables, banking and IT were the top losers.
Stocks in news:
Dhanlaxmi Bank hit upper circuit after soaring 10 percent as Allahabad Bank and Corporation Bank rose around 5-7 percent on the good news that RBI took them out of the PCA framework. These banks can restart normal lending and can continue to expand their businesses, which brightens the scope of the entire PSU banking sector that is trying all means to revive and improve their NPAs.
One of ace investors, Mohnish Pabrai’s favourite stock Rain Industries tanked 10 percent after reporting a weak quarter with a net loss of Rs 139.1 crore against a profit of Rs 307.2 crore the previous year. Shares of Max India tumbled 13.5 percent after the company approved selling its stake in Max Bupa Health Insurance Company.
European markets are trading lower ahead of meeting between US President Donald Trump and North Korean leader Kim Jong Un in Vietnam. FTSE and DAX down 0.7 percent, while CAC index is trading 0.3 percent lower.
Asian markets ended mixed ahead of the meeting. Shanghai Composite was up 0.42 percent at 2,953.82,and Hang Seng declined about 0.15 percent to close at 28757.44.
Nikkei rose 0.5 percent to close at 21,556.51 and Kospi added 0.37 percent to close at 2,234.79.