Sharp rise in coronavirus cases drag market; Sensex sees 946 pts swing intraday

A day after logging healthy gains, Indian equities resumed their downward journey as the cases of coronavirus rose sharply to 28, fanning concerns over the health of the economy that has already been weak for the last few quarters.

Major markets across the globe trod water as an emergency rate cut by the US Fed failed to soothe the concerns of coronavirus’s economic fallout.

Indian market witnessed strong bouts of volatility as the equity barometer swung 946 points in intraday trade, eventually settling in the negative territory.

Even as the governments and central banks of many countries vowed to take steps to mitigate the impact of coronavirus on the global economy, rising worries of coronavirus are acting as a dominant factor for the high volatility in the equity markets.

Sensex ended 214 points or 0.55 percent lower at 38,409.48 while Nifty shut shop at 11,251, with a loss of 52 points or 0.46 percent.

Midcaps and smallcaps suffered more as their sectoral indices on BSE plunged 2.53 percent and 2.83 percent, respectively.

“Fresh virus cases reported in India overshadowed monetary easing by the Fed. Despite mixed global cues, the domestic market took a hit fuelled by weakness in metals, banks and auto stocks,” said Vinod Nair, Head of Research, Geojit Financial Servies.

Nair added that the short-term tremors due to the virus could be felt across the globe including Indian indices but for the long term, the impact looks limited.

Santosh Meena, Senior Analyst at TradingBells is of the view that the market is trying to find a bottom after a vertical fall but there is a need for some kind of relief on the coronavirus front for the market to witness any relief rally.

Top Nifty gainers: Cipla, Dr Reddy’s Labs, Sun Pharma

Top Nifty losers: Yes Bank, Eicher Motors, Bajaj Finance

Stocks & Sectors:

On the sectoral front, BSE Bankex, with a loss of 1.72 percent, emerged as the top lower, followed by Finance, Basic Materials, Industrials and Realty, each falling over 1 percent.

On the contrary, BSE Healthcare, Information Technology and Teck indices bucked the trend and rose over a percent each.

As many as 386 stocks, including IndusInd Bank, ITC, Central Bank of India, Canara Bank, Exide Industries and LIC Housing Finance, hit their 52-week lows on BSE.

Besides, Lakshmi Vilas Bank, Adani Green Energy, Indiabulls Real Estate and Jain Irrigation featured among the 307 stocks that hit their lower circuits.

Volume spike of 100-200 percent was seen in stocks like Pidilite Industries, Shriram Transport, GMR Infra and UBL.

Long Buildup was seen in stocks like Cipla, Dr Reddy’s Labs, Power Grid, Sun Pharma and Oil India.

Short Buildup was seen in stocks like Tata Chemicals, Yes Bank, Shriram Transport, Century Textiles and NCC.

Stocks in News

Airline stocks fall: Share prices of aviation companies InterGlobe Aviation (IndiGo) and SpiceJet ended 4-7 percent lower as rising coronavirus cases make the skies gloomier for air carriers. As per rating agency ICRA, the outlook for India’s aviation industry remains “negative” in the wake of the viral outbreak.

Tata Motors: The share price of Tata Motors fell 5 percent, a day after the company reported a 34.42 percent cut in production in February 2020 due to coronavirus. The passenger vehicle production fell 32 percent year-on-year (YoY). The commercial vehicle volume, too, registered a 35 percent YoY decline led by a drop of 45.8 percent in the medium and heavy commercial vehicles and a 29.4 percent drop in the light commercial vehicle segment.

Tata Chemicals: Shares of Tata Chemicals tanked 57 percent as it turned ex-date on March 4 and began trading on the bourses without the conglomerate’s food business. It had fixed March 5, as the record date for determining the shareholders of the company to whom equity shares of Tata Consumer Products (TCPL) would be issued.

Premier: Premier share price ended 3 percent lower after the company suspended its activities at the Chakan plant. The company management has been compelled to suspend its activities at the Chakan plant with immediate effect until further notice, as per company release.

Technical View:

The Nifty50 after opening sharply higher remained highly volatile throughout the session and the recovery from day’s low in last hour of trade helped it trim losses as investors/traders looked worried after coronavirus cases rose in India to 28 from 6 earlier.

The index closed below 11,300 levels and formed a bearish candle on daily charts as closing was much lower than opening levels.

Amit Shah, Technical Research Analyst with Indiabulls Securities said only a close above 11,350 zones will bring back some near-term pullback hopes, whereas 10,900-11,000 continues to remain an important support zone from where Nifty has already bounced back once.

On the upside 11,550 is likely to act as a stiff resistance zone. Fresh positional shorts should be avoided as index is quite oversold and near the important support zone, shah said.

Three levels to watch on Thursday would be 11,083, 11,355, 11,433.

Max Call OI: 11,800, 11,700

Max Put OI: 11,000, 11,300

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