Investors lose Rs 1.65 lakh cr in a day as market hits 7-month low

A strong wave of across-the-board selling enveloped Indian market on September 19, causing the benchmarks Sensex and Nifty to fall to their 7-month low levels.

Close at its lowest level since March 1, the BSE Sensex plunged for 470 points or 1.29 percent to settle at 36,093.47 with only four stocks – Tata Motors, HDFC Bank, Bharti Airtel and Asian Paints – in the green.

Yes Bank, Tata Steel, IndusInd Bank, ICICI Bank and Maruti Suzuki emerged as the top loser in the index.

The overall market capitalisation of BSE listed firms dropped to Rs 1,38,54,439.41 crore from Rs 1,40,19,877.32 crore on September 18, making investors poorer by Rs 1.65 lakh crore in a single day.

The Nifty index closed at 10,704.80, down 136 points, or 1.25 percent, with 7 stocks in the green and 43 in the red. The index managed to hold 10,700-mark but ended at the lowest level since February 19.

Fundamentally, the concerns over rising geopolitical tension, crude oil prices and the deteriorating macroeconomic environment continued to keep the risk appetite of investors low.

Moreover, uncertainty over US Fed’s future rates trajectory also made investors look away from riskier equities.

Analysts think the steep fall in the market has a technical angle as well.

“Nifty breached the 10,800 level which had been acting as crucial support for the last many sessions. The sharp fall in the market can be attributed to the fact that it is lurching towards a new support on the downside,” said Pankaj Pandey, Head of Research at ICICI Securities.

The broader market fell in sync with benchmarks. The BSE Midcap and Smallcap indices closed 1.15 percent and 1.48 percent down, respectively.

Barring BSE Telecom (up 0.17 percent), all sectoral indices closed with strong losses. BSE Energy, Oil & Gas and Realty fell up to 2 percent.

As many as 268 stocks, including Coffee Day, CG Power and HDIL touched their lower circuits while 116 stocks, including Yes Bank, Indiabulls Housing Finance and Syndicate Bank, hit their 52-week lows on BSE.

The breadth of the market strongly favoured decliners as 1,828 stocks suffered losses against 686 that logged gains on BSE.

Top news of the day:

A Delhi court on September 19 extended till October 3 the judicial custody of former finance minister P Chidambaram in connection with the INX Media corruption case.

The Income-Tax Department has unearthed several instances of cash transactions undertaken by Oberoi Realty during a search last month. Documents uncovered during the probe threw up names of Bollywood actors who were involved in cash dealings with the company.

National Aeronautics and Space Administration (NASA) has said India’s Vikram lander may not have been in the field of view of the camera onboard its orbiter.

Israel’s embattled Prime Minister Benjamin Netanyahu on September 19 called on his main challenger Benny Gantz to form a unity government with him to avoid a third election after no clear winner emerged in the unprecedented repeat polls, PTI reported.

Transport unions in Delhi-NCR have begun a day-long strike on September 19 to protest against the heavy fines under the newly-amended Motor Vehicles Act.

Stocks in news:

Yes Bank ended with a strong loss of 15.52 percent at Rs 54.15 on BSE, emerging as the top loser in Sensex after CARE downgraded NCDs of the bank’s promoter, MCPL.

Shares of Axis Bank fell 1.54 percent to Rs 638.25 amid reports that the bank may raise funds via QIP (qualified institutional placement) in the next few days. CNBC-TV18 reported the bank is looking to raise between $ 1.5-2 billion (the equivalent of Rs 14,000 crore) via equity issuance.

Vodafone Idea jumped 11.93 percent to Rs 5.44 after the Telecom Regulatory Authority of India (TRAI) released a consultation paper seeking a review of the deadline to bring down the interconnect usage charge to zero.

Shares of Zee Entertainment Enterprises plunged over 7.90 percent to Rs 308.80 following reports that the company’s promoter had been restricted from selling stake in the media company.

Shares of Coffee Day Enterprises plunged 5 percent to settle at Rs 68.65 amid reports that the lenders to the company invoked pledged shares. CNBC TV18 reported that lender to Coffee Day invoked pledge on 4.95 percent stake from September 9-11.

Global updates:

A rally in bank stocks for the first time in four sessions lifted European shares on Thursday, after the US Federal Reserve cut interest rates but set a higher bar for further reductions, reported Reuters.

Major Asian peers ended with slight gains. Shanghai Composite Index closed 0.46 percent up at 2,999.28, while Kospi closed at 2,080.35, up 0.46 percent. Nikkei settled 0.38 percent higher at 22,044.45.

Technical view on the market:

After the bearish triangle breakout, the Nifty had retested the pattern breakout line on September 18. The follow-through selling was witnessed on September 19 that pushed the index close to the August low of 10,637.

“The selling pressure got aggravated as the index breached the swing low of 10,796. Nifty has reached its daily lower Bollinger Band also, which is now in the expansion mode. This means that the band can permit the price action to extend on the downside,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan by BNP Paribas.

“Going ahead, the August low of 10,637 can now provide some support to the index. However, it is likely to break eventually. Thus traders can continue to hold the short positions and add more once the low breaks. The short term target on the downside is at 10,455 that is the 78.6 percent retracement of the October – June rally,” Ratnaparkhi added.Get access to India’s fastest growing financial subscriptions service Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the website or mobile app.