Market falls for 2nd straight day; banks, financials top drag

Indian market extended losses into the second consecutive session on September 30, dragged by poor show by a select bank and financial heavyweights, including HDFC twins, ICICI Bank, IndusInd Bank and State Bank of India.

Investors kept their bets low amid lack of fresh triggers at home and mixed global cues, while Rupee’s slide against the US dollar weighed on sentiment.

Market experts expect the consolidation in the market to continue until the result season begins. Moreover, all eyes are now on the RBI’s monetary policy meet on October 4 which will give a direction to the market in the near-term.

“We expect that in the near-term, the RBI policy outcome will provide some direction to the market. Further, the market is likely to remain rangebound until the beginning of the earnings season from mid-October. Global developments, particularly US-China trade war, and crude oil prices may continue to induce volatility in the market,” said Ajit Mishra, Vice President – Research at Religare Broking.

Mishra suggests one should stick to stock specific approach in such a market.

The Sensex closed with a loss of 155 points, or 0.40 percent, at 38,667.33, with 13 stocks in the green and 17 in the red.

Bharti Airtel, HCL Technologies, Infosys, ITC and Tata Consultancy Services ended the day as top gainers in the Sensex kitty, while Yes Bank, IndusInd Bank, State Bank of India, ICICI Bank and Sun Pharma finished as the top losers, in that order.

The Nifty pack closed 38 points, or 0.33 percent, lower at 11,474.45, with 22 stocks up and 28 down.

The broader markets suffered more than the frontline indices. BSE Midcap and Smallcap indices declined 1.13 percent and 1.21 percent, respectively, underperforming BSE Sensex.

Among the sectoral indices, BSE Telecom (up 3.86 percent), Teck (up 2.45 percent) and IT (up 2.33 percent) bucked the trend to log strong gains.

On the flip side, BSE Bankex (down 2.64 percent), Finance (down 2.40 percent) and Healthcare (down 1.57 percent) emerged as the top losers.

As many as 323 stocks, including Indiabulls Real Estate, CG Power and Industrial Solutions, Indiabulls Integrated Services, Coffee Day Enterprises, Eveready Industries India and Lakshmi Vilas Bank, hit their lower circuits on the BSE during the day.

After two consecutive sessions of losses, both Sensex and Nifty have retreated nearly 1 percent. The overall market capitalisation of BSE-listed firms dropped to Rs 1,47,17,456.10 crore from Rs 1,48,45,854.70 crore on September 26, making investors poorer by Rs 1.28 lakh crore in two sessions.

Top news of the day:

Delhi High Court refused bail to former Finance Minister P Chidambaram in the INX media case. The court further added that it cannot rule out the possibility of Chidambaram influencing the witnesses.

Walmart Inc-owned Flipkart and rival Amazon Inc said they made record sales in the opening day of their annual festive season sales in India that kicked off over the weekend.

The Finance Ministry is working on a list of private and public sector infrastructure projects, which will be updated in real-time to reflect the current status of the plan’s execution, reported Business Standard.

OnePlus has confirmed that the company would soon start manufacturing its first smart-TV in India.

After being pounded by heavy rain over the weekend, most parts of the Bihar capital remained submerged even as the state-wide death toll mounted to 25, PTI reported.

Prime Minister Narendra Modi said optimism about India was the common thread that emerged during his high-profile meetings during his US tour last week.

Stocks in news:

Shares of Yes Bank plunged 15.06 percent to finish at Rs 41.45 on BSE on September 30 despite receiving approval from RBI to raise more capital.

Shares of Lakshmi Vilas Bank fell 4.92 percent to Rs 34.75 after the RBI initiated prompt corrective action plan against it, with effect from September 27, 2019.

Shares of Asian Paints slipped by almost a percent to end at Rs 1,763.15 after global research firm Morgan Stanley downgraded the stock from ‘overweight’ to ‘equalweight’ with a target of Rs 1,820 per share.

Shares of Reliance Capital cracked 12.32 percent to settle at Rs 24.55 after the company concluded the sale of its stake in Reliance Nippon Life Asset Management.

Shares of Cipla ended at Rs 425.05, down 3.28 percent, after the company received 12 observations for its Goa facility. The United States Food and Drug Administration (USFDA) conducted a cGMP inspection at the company’s Goa manufacturing facility from September 16-27, 2019.

Shares of Indiabulls Housing Finance plunged as much as 34.39 percent to Rs 255.50 on concerns over its merger with Lakshmi Vilas Bank, which has been placed under the Reserve Bank of India’s prompt corrective action plan.

Shares of Kalpataru Power Transmission climbed 3.05 percent to Rs 488.05 after the company bagged orders worth Rs 775 crore.

Global updates:

European shares little changed today as investors shrugged off fresh concerns about US-China trade negotiations and looming US tariffs on European imports, reported Reuters.

Among the Asian peers, China’s Shanghai Composite Index fell 0.92 percent to 2,905.19, while Korea’s Kospi climbed 0.64 percent to end at 2,063.05. Japan’s Nikkei ended 0.56 percent lower at 21,755.84.

Technical view on the market:

Nifty breached the swing low of 11,416 today. The index formed a base near the junction of the 40-hour exponential moving average and the hourly lower Bollinger Band. The benchmark index attracted some buying as it neared the lower end of the Gap area on the daily chart at 11,381.

“The index seems to be preparing for the next leg up. Structurally, the index can either form a bullish Flag or a triangle pattern on the hourly chart before it resumes the larger uptrend. On the higher side, 11,550-11,610 will be the key hurdle zone to watch out for. Once that gets taken out, the index will be poised to head towards the recent high of 11,694 and the 78.6 percent retracement of the June–August decline, that is, 11,790,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan by BNP Paribas.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.