Taking Stock! Sensex below 39K; Infosys m-cap drops by Rs 50K cr

Indian markets underperformed global markets as both the Sensex and the Nifty closed below their crucial support levels. The S&P BSE Sensex witnessed a fall of more than 300 points, closing below 39,000 while the Nifty50 broke below 11,600 levels.

The final tally on D-Street – the S&P BSE Sensex plunged 334 points to close at 38,963, while the Nifty50 dropped 73 points to close at 11,588.

The biggest drag on both indices was Infosys which plunged over 16 percent, marking its biggest single-day fall since April 2013. The stock is now trading at levels last seen around December 2018. The stock closed at Rs 643.30 on the BSE.

Investors of the IT service provider lost more than Rs 50,000 crore, as market capitalisation fell from Rs 3,26,939 crore on October 18 to Rs 2,76,300 crore.

Fall in Infosys may have an impact on the IT sector but the overall trend of the market will be healthy, led by marginally better results in Q2 till date, suggest experts.

The market is expected to remain volatile in the near term, and the trend will be dictated by the on-going earning season, outcome of the state election, US-China trade deal, and development on the Brexit deal, they say.

Sectors and stocks:

Sectorally, the S&P BSE Healthcare index rose 1.5 percent, followed by the S&P BSE Consumer Durable index which gained 1.52 percent, and banking that rose 1.05 percent.

On the losing front, IT index plunged more than 7 percent, followed by the telecom index which was down 2 percent, and the Auto index that slipped 0.4 percent.

The broader market outperformed as the S&P BSE was down 0.09 percent while the S&P BSE Smallcap index rose 0.48 percent.

Volume spike was seen in stocks like Infosys, Jubilant FoodWorks, Shree Cement, and Century Textiles.

Stocks that are seeing long buildup include names like Jubilant Food, Century Textiles, and NIIT Technologies.

Stocks in news:

Bajaj Finance fell more than 2 percent even though the company reported a whopping 63 percent year-on-year (YoY) rise in July-September quarter profit at Rs 1,506.3 crore, beating analysts expectations.

Shares of Dish TV fell more than 12 percent after the promoters of the company reduced their stake in the quarter ended September 2019.

Shares of Bank of Maharashtra surged 13 percent on BSE, buoyed by the company’s strong July-September quarter numbers. The company’s net profit jumped over four times to Rs 114.6 crore year-on-year (YoY) against Rs 27 crore in the corresponding quarter in 2018.

Shares of Shree Cement rallied nearly 5 percent after the company’s second-quarter earnings beat analyst expectations on October 19. On a year-on-year basis, the cement maker reported an over six-fold jump in profit to Rs 309 crore, driven by healthy operating income and low base.

Technical View:

Nifty forms a bearish candle on the daily charts but closed above its 5-days EMA @11,543.

It was a day of consolidation for Indian markets after a 3 percent rally seen in the week gone by.

Important resistance levels are placed near 11,700-11,770, suggest experts.

Weakness in the index shall get more pronounced if it closes below 11,550 levels.

Unless index consolidates around these levels and witnesses a fresh breakout above 11,700 levels, further upsides remain limited, suggest experts

We expect the market to remain either sideways or witness more profit booking in the next couple of trading sessions. In case, if 11550 is breached on a closing basis then the initial target shall be placed around 11430 levels, they say.

But, a strong close above 11700 shall resume the upmove with initial targets placed in the zone of 11,772 – 11,798 kinds of levels

Three levels to track on Wednesday – 11,573, 11772, 12000

Max Call OI: 12000, 11700

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