It was Monday blues written all over – thanks to weak global cues. The S&P BSE Sensex plunged more than 300 points to break below its crucial psychological support at 38,000 as fears of a global slowdown and recession hit equity markets.
The market capitalisation (m-cap) of BSE-listed companies fell by 1.21 lakh crore on Monday to Rs 147.01 lakh crore compared to Rs 148.22 lakh crore recorded on 22 March 2019.
The Nifty50 slipped below its crucial short-term moving average of 5-days exponential moving average (EMA) to close below 11,400 levels with a cut of over 100 points.
Asian market started the day in red which was later joined by European peers as fears of a possible recession in the US could impact global growth next year. The US Treasury yield curve which extended to 3-month bills inverted for the first time since 2007 which is a siren for the slowing economy.
The overall breadth of the market was very weak and the advance-decline ratio was tilted more towards declines. All the major indices closed mostly in the red.
After a strong rally of over 1,000 points on the Nifty since 19 February, most experts were factoring in a pullback which has happened. There is a higher possibility that the index could retest 11100-11200 levels before inching higher.
Investors are advised to remain stock specific and remain with large-cap names like RIL, ICICI Bank, SBI etc. among others.
“We have seen a strong momentum of about 1000 in Nifty in the last 4-5 weeks. The index rallied from 10585 and headed towards 11572 but in the last three trading session, the index slipped below 11550 largely weighed down by profit taking,” Chandan Taparia, Derivatives & Technical Analyst at Motilal Oswal told Moneycontrol.
“We expect Nifty to take support near 11,180-11200 zone ahead of expiry. In terms of sectors, we saw some recovery in telecom, media, and infra counters but the way market is witnessing some profit taking most of the rate sensitive and high beta counters will come under pressure,” he said.
Taparia advises investors to stay with heavyweight stocks such as HDFC Bank, RIL, Voltas, Bata India, Jubilant FoodWorks etc. among others.
Stocks in news:
Shares of Jet Airways gained more than 12 percent after Nareh Goyal cease to be the Chairman of the company. “This can be a breather for the Company which needs funds to pay-off outstanding dues as there are chances that Ethiad may infuse funds as their initial condition of not having Goyal on Jet’s board is now met or for that matter any new investor can come given that no legacy management will be inherited,” an expert said.
OMCs such as IOC, HPCL, and BPCL rose 1-4% as Brent crude fell by over a percent to $ 66.36 per barrel in trade.
Karnataka Bank fell 2 percent after the company reported fraud of Rs 13.26 crore to the Reserve Bank of India (RBI).
Shares of Bharat Gears rose 5 percent after the company said it is going to issue equity shares by way of rights issue in the ratio of 1:7 with an issue price is Rs 105 per share.
The share price of CCL Products India and Oil and Natural Gas Corporation (ONGC) gained 2-4% after companies declared an interim dividend for the financial year 2018-19.
European markets are trading lower on Monday on the back of rising concern over a recession in the US.
Asian markets also ended lower on Monday with Nikkei fell the most as index shed 3 percent to end at 20,977.11, while Shanghai composite slipped nearly 2 percent to 3,043.03.
Hang Seng also shed 2 percent to end at 28,523.35 and Kospi was down 1.92 percent at 2,144.86.