Coronavirus concerns weigh on D-St; Nifty falls for 2nd day, but holds 12K

Indian market consolidated for the second day in a row on February 10 largely weighed by concerns around Coronavirus. The Nifty50 bounced back after hitting crucial support near 12,000 while the S&P BSE Sensex closed below 41,000.

Let’s look at the final tally on D-Street on February 10 – the S&P BSE Sensex fell 162 points to 40,979 while the Nifty50 closed 66 points lower at 12,031 on Monday.

Sectorally, S&P BSE Metal, Auto, Power, Consumer Durables and Public Sector indices were under pressure.

A mixed performance was seen from the broader market as the S&P BSE Midcap index fell 0.78 percent while the S&P BSE Smallcap index was largely in line with benchmark indices, down 0.43 percent.

At a time when benchmark indices retested crucial support levels more than 100 stocks on the BSE hit their fresh 52-week high that includes names like MRF, Abbott India, Bajaj Finance, SRF, Info Edge, Avenue Supermarts, Divis Laboratories, Pidilite Industries, and JK Cement.

Going forward, markets would take cues from the outcome of the Delhi Assembly elections on Tuesday as well as macro data around inflation will be important to watch out for, suggest experts. Globally, any adverse developments with respect to Coronavirus will have a rub-off effect on Indian markets.

“Market is feeling coronavirus jitter which will add volatility in the short-term. Companies with high exposure to the Chinese market either in terms of export or import have some impact,” Vinod Nair, Head of Research, Geojit Financial Services Ltd said.

“Series of macro data will be released during this week like CPI & WPI inflation and IIP data. Consensus is showing a rise in inflation to 7.4% in January influenced by food prices while expecting some stability in IIP for December,” he said.

Nair further added that during this current short term uncertainties investors are likely to wait for some consolidation in quality mid-caps”

Top Nifty gainers: TCS, Bajaj Finance, and UPL

Top Nifty losers: Tata Steel, M&M, ZEE Entertainment

Stocks & Sectors:

Sectorally, the S&P BSE Metal index plunged more than 3 percent, followed by the S&P BSE Auto index fell 2.3 percent, and the Power index was down 1.6 percent.

Volume Spike of 100-800% was seen in stocks like M&M, GAIL India, Motherson Sumi, MRF, and Bharat Forge

Long Buildup – GAIL, Cadila Healthcare, Divis Laboratories

Short Buildup – Motherson Sumi, Bharat Forge, JustDial, SAIL

Stocks in the news:

UPL share price rose 5 percent and was also the top Nifty gainer on February 10 after the company’s Q3 FY20 net profit rose 52 percent to Rs 701 crore against Rs 461 crore and revenue jumped 80.6 percent to Rs 8,892 crore versus Rs 4921 crore, YoY. HSBC maintained a buy rating with a target of Rs 680 per share.

Tata Steel: Tata Steel share price declined almost 6 percent on February 10 after the company reported a weak set of numbers in the quarter ended December 2019.

Motherson Sumi: Share price of Motherson Sumi fell over 5 percent on February 10 after the company reported 38.6 percent decline in its consolidated profit at Rs 340.32 crore for the quarter ended December 31, 2019.

Mahindra & Mahindra: Mahindra & Mahindra share price tanked over 7 percent after the company posted a 73 percent decline in its net profit (YoY).

Bharat Forge: Share price of Bharat Forge fell over 3 percent on February 10 after the company reported a massive 58.7 percent YoY decline in profit due to weak demand both in domestic and international markets.

SAIL: SAIL share price shed over 5 percent after reports suggested that the government is planning to sell 5 percent stake in the PSU firm through an offer for sale (OFS). As of December 31, the government held 75 percent stake in SAIL. It had last sold 5 percent stake in the steel CPSE in December 2014.

Technical View:

Nifty formed a Bearish Belt Hold kind of pattern on daily charts

Nifty closed below 50-Days EMA placed at 12,054

A breach of 11990-11950 could facilitate the downside target placed in the zone of 11783 – 749 levels. Contrary to this some sideways consolidation can be expected if Nifty manages to close above 12100 levels.

Positional traders are advised to create fresh shorts on a breach of 11950 levels on a closing basis and look for a target of 11770.Exclusive offer: Use code “BUDGET2020” and get Pro’s Subscription for as little as Rs 333/- for the first year.