Moody#39;s downgrade spoils the mood; indices falls for 3rd day in a row

Indian benchmark, Nifty extended its losing run into the third consecutive session on February 17 as investor sentiment remained fragile due to concerns over India’s economic growth, while the Supreme Court’s AGR order and its impact on telecom and banking stocks continued weighing on the sentiment.

Moody’s on February 17 slashed its 2020 growth projection for India to 5.4 percent from 6.6 percent forecast earlier.

“Domestic growth concerns seem to be back in the market as indicated by a recent downgrade by Moody’s,” said Vinod Nair, Head of Research at Geojit Financial Services.

He added that banks having significant exposure in telecom players continue to be in the limelight as lack of funds could delay the payments and degrade the quality of banks’ balance sheet.

Continuous rise in coronavirus cases has forced major Asian peers to downgrade their growth outlook which could cause a ripple effect in other nations in the first quarter while recovery is expected from the second quarter, Nair pointed out.

After witnessing a positive opening, the market benchmark Nifty slipped in the negative soon and traded below both 50-DMA and 50-EMA for the most part of the session, eventually settling with losses.

Sensex closed 202 points, or 0.49 percent, down at 41,055.69, while Nifty ended 68 points, or 0.56 percent, lower at 12,045.80.

BSE Midcap and Smallcap indices underperformed the benchmark, suffering losses of 0.91 percent and 1.02 percent, respectively.

Top Nifty gainers: Titan, GAIL and Nestle

Top Nifty losers: Yes Bank, Coal India and ONGC

Stocks & sectors:

Most sectoral indices incurred losses, with BSE Oil & Gas and Utilities losing 2.39 percent and 2.07 percent, respectively. Power, Realty, Healthcare, Energy, Industrials and Capital Goods indices fell over a percent each.

On the other hand, Consumer Durables index bucked the trend to settle 1.60 percent higher, supported by gains in shares of Titan, Crompton Greaves Consumer Electricals and Orient Electric.

BSE IT and Teck ended with milder gains of 0.29 percent and 0.23 percent, respectively.

As many as 237 stocks, including IndusInd Bank, ITC and ONGC, hit their 52-week lows on BSE, against 78 stocks that hit their 52-week highs.

Moreover, as many as 323 stocks, including Shankara Building Products, Indiabulls Integrated Services, Jain Irrigation Systems and Lakshmi Vilas Bank, hit their lower circuits on BSE against 175 stocks that hit their upper circuits.

A volume spike of 1,500 percent was seen in Muthoot Finance. Besides, Volume spike of 200-700% was seen in stocks like LIC Housing Finance, Balkrishna Industries and Manappuram Finance.

Long Buildup: Muthoot Finance, Balkrishna Industries, Manappuram Finance and Mindtree.

Short Buildup: NCC, LIC Housing Finance, Glenmark Pharmaceuticals and Sun TV.

Stocks in the news:

ONGC: Oil and Natural Gas Corporation (ONGC) share price fell over 3 percent after the state-run company posted a 49.75 percent year-on-year (YoY) fall in standalone profit at Rs 4,151.63 crore for the quarter ended December 31.

PSU Banks: Most PSU bank stocks suffered losses after the Supreme Court refused relief and asked telecom operators to pay adjusted gross revenue (AGR) dues by March 17. The Nifty PSU Bank index fell nearly 3 percent amid fears of NPA in the telecom space.

PNB, Bank of Baroda, OBC, Syndicate Bank, SBI, Indian Bank, Central Bank and Canara Bank were among the top losers, ending 1-4 percent lower.

Muthoot Finance: Muthoot Finance share price surged 17 percent after the gold- loan company posted healthy earnings in the December quarter. It reported a healthy 66.05 percent year-on-year increase in Q3FY20 profit at Rs 803.4 crore.

Alphageo: Alphageo share price jumped almost 13 percent after the company bagged orders worth Rs 128 crore.

Technical view:

Nifty50 fell for third consecutive session and continued to trade below its 50-day moving average amid economic growth concerns after Moody’s cut FY20 GDP growth forecast to 5.4 percent (from 6.6 percent earlier).

Fears over banking exposure to the telecom sector after SC verdict on AGR liability and continuous rise in coronavirus cases also dented sentiment.

The index closed below 12,050 levels and formed bearish candle for the third straight session as closing was lower than opening value.

Considering the consistent weakness after recent rally, experts advised traders to avoid long positions for the time being.

Three levels: 12,037 | 12,158 | 12,226

Maximum call OI: 12,500 | 12,300

Maximum put OI: 12,000 | 11,800

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