China virus spreads fear; Sensex tanks 450 pts, Nifty below 12,200

Indian stock markets ended lower, copying a wider world trend as worries grew about the economic impact of China’s fast-spreading coronavirus.

The Sensex plunged nearly 500 points on January 27 to drop to its lowest level in a month. The Nifty declined more than 100 points to slip below its crucial support at 12,200 and January 24’s intraday low of 12,149.

The death toll in China climbed to 81 and more than 10 countries, including France, Japan and the United States, reported cases of the virus that causes acute respiratory infection. Some health experts questioned whether China can contain the epidemic, said a Reuters report.

In Asia, Japan’s Nikkei average slid 2 percent, the biggest one-day fall in five months. Many markets in Asia were closed for the lunar new year holiday.

“Coronavirus outbreak in China took a toll on Indian equities as well today as financials & metals bore the brunt of the selling. Except for select pharmaceutical stocks, which held the fort and gained, the broader markets traded weak with the Nifty losing 130 points,” S Ranganathan, Head of Research at LKP Securities told Moneycontrol.

The final tally on D-Street: Sensex tanks 458 points to close at 41,155 and the Nifty ends the day at 12,119, down 129 points.

The broader market outperformed the indices. The BSE Smallcap index closed flat with a positive bias, while the BSE Midcap index was down 0.4 percent.

Sectorally, action was seen in the BSE Healthcare index, while profit-taking was witnessed in metals, telecom, power, and banks. The NiftyBank fell 1.29 percent, or more than 400 points, to 30,837.

But there was plenty of action in specific stocks. More than 100 stocks recorded fresh 52-week highs. These include Atul, Dixon Tech, Dr Reddy’s Laboratories, PVR, APL Apollo, Divis Laboratories, Bata India, and Dr Lal Pathlabs.

Top Nifty gainers: Dr Reddy’s Laboratories, M&M, Cipla and Eicher Motors

Top Nifty Losers: IndusInd Bank, Hindalco, Tata Steel, and Vedanta

Stocks & sectors

Sectorally, the S&P BSE Healthcare index was the top gainer, up 1.4 percent supported by gains in Wockhardt, IOL Chemicals, SPARC, Dr Reddy’s Laboratories and Suven Life Sciences.

The S&P BSE Metal index fell 3.2 percent, followed by telecom, which was down 1.7 percent. The power index dropped 1.48 percent and the Bankex was down 1.18 percent.

Volume spike of 100-1000% was seen in M&M Finance, ICICI Bank, Bajaj Auto, HDFC, Lupin, Wipro and Dr Reddy’s Laboratories.

Long buildup: Chola Finance, Jubilant FoodWorks and Adani Enterprises

Short buildup: HDFC, Amara Raja Batteries,  Maruti Suzuki and JSW Steel

Stocks in news

Vodafone Idea: Shares of Vodafone Idea fell 4 percent after a public interest litigation in the Supreme Court sought quashing of a recent direction of the Department of Telecommunications on dues related to adjusted gross revenue.

Dr Reddy’s Laboratories: Pharma major Dr Reddy’s Laboratories rose more than 5% as revenue during the quarter grew 13.86 percent year-on-year to Rs 4,383.8 crore, driven by growth across regions.

Wockhardt: The share price of Wockhardt zoomed 18 percent after the pharmaceutical and biotechnology company reported a consolidated profit of Rs 9.6 crore against a loss of Rs 71.1 crore YoY.

Tilaknagar Industries: The share price of liquor manufacturer Tilaknagar Industries jumped 5 percent after the company settled the dues of IDBI Bank by paying Rs 16.04 crore towards a full and final settlement of the total dues of Rs 44 .13 crore.

Technical view

The Nifty formed a long bearish candle, broke below 50-day MA placed at 12,124.

A close below 12087 (swing low of January 22), which also coincides with the value of its 50-day EMA (12,088) could trigger further selling.

If the fall on January 27 was just a reaction to global cues, then the Nifty should remain stable in the next session and make an attempt to consolidate between 12,087 and 12,227 levels, say experts

Traders are advised to remain neutral and can consider a short side trade on a close below 12,087 and look for a target of 11,900, they say

Three levels: 12,087, 12,216, 12,227Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Moneycontrol 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 Moneycontrol website or mobile app.