What the biggest single day fall in Sensex mean for investors

Indian market witnessed its worst fall in history in absolute terms on both Sensex and Nifty50. The global market rout in equities had a rub-off here. The spread of coronavirus and a plunge in oil prices were the key culprits.

The Indian market is likely to remain under pressure in the near term since the sentiment is weak globally. Investors have lost about Rs 7 lakh cr in a single trading session.

The S&P BSE Sensex, Nifty and NiftyBank witnessed their biggest one-day falls in absolute terms.

On the other hand, the Volatility Index surged 15 percent to end at a 6-year closing high.

Oil fell the most since 1991 after Saudi Arabia started a price war with Russia by slashing its selling prices and pledging to unleash its pent-up supply onto a market reeling from falling demand because of the outbreak, said a Reuters report.

The number of people infected with the coronavirus has topped 107,000 across the world as the outbreak reaches more countries and causes more economic pain, it said.

Globally, Japan’s Nikkei fell 5.7 percent and Australia’s commodity-heavy market 5.9 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan lost 3.7 percent in its worst day since late 2015, while Shanghai blue chips dropped 2.2 percent.

Let’s look at the final tally on D-Street – the S&P BSE Sensex plunged 1941 points or 5.1 percent while the Nifty50 was down 4.9 percent to close at 10,451 on Monday. Indian markets will remain shut on Tuesday on account of a public holiday.

The S&P BSE Sensex index witnessed its worst percentage fall since August 24, 2015. The index closed at its lowest level since February 19, 2019.

Sectorally, selling pressure was seen in the S&P BSE Energy index, followed by metals, infrastructure, oil & gas, and IT.

On the broader markets front, the S&P BSE Midcap index plunged 4.7 percent while the S&P BSE Smallcap index fell 4.2 percent.

On a day when both Sensex and Nifty50 witnessed one of the worst days in history more than 800 stocks on the BSE recorded their fresh 52-week low that includes names like RBL Bank, Centrum Capital, Gillette India, Bajaj Holdings, Hero MotoCorp, ACC, Piramal Enterprises, and L&T.

Investors would continue to monitor crude oil prices, currency movement and the updates on the spread of Coronavirus cases, suggest experts.

“Indian markets are facing a deluge of negative triggers. Global markets are plunging after the break of an alliance between OPEC and Russia resulted in the worst one-day crash in crude prices (more than 30%) in nearly 30 years, fueling panic triggered by the escalation of the coronavirus epidemic,” Deepak Jasani, Head Retail Research, HDFC Securities told Moneycontrol.

“Technically, with the Nifty moving down further, the short term trend remains down. The Nifty could test the recent lows of 10295-10138 in the coming sessions. Any pullback rallies could find resistance at 10637-10744,” he said.

Stocks & Sectors:

Sectorally, the S&P BSE Energy index plunged 9.7 percent, followed by the S&P BSE Metal index that fell 7.6 percent, S&P BSE IT index was down 5.4 percent, and the S&P BSE Oil & Gas index plunged 5.2 percent.

More than 170 stocks on the BSE hit lower circuit that includes names like Welspun Corp, Alok Industries, Sadbhav Engineering, Eros International, Reliance Infra, Indiabulls Real Estate, and IRCTC.

Volume spike of 100-300% was seen in stocks like Berger Paint, ONGC, OIL, BPCL, Power Grid, and RIL.

Short Buildup was seen in stocks like HDFC Life, MindTree, Bajaj Auto, Ambuja Cements

Long Buildup was seen in stocks like Vodafone Idea, HPCL, and NTPC to name a few

Stocks in news:

Yes Bank share price added 31 percent as State Bank of India (SBI) is likely to pick up 49 percent stake in former.

Hikal share price slipped nearly 7 percent after the Maharashtra Pollution Control Board (MPCB) asked the drug ingredient manufacturer to close its Mahad unit.

State Bank of India (SBI) share price fell 6 percent after the company said it is going to infuse capital to rescue the private lender Yes Bank. SBI is allowed to buy up to 49 percent stake in Yes Bank along with an initial investment of upto Rs 2,450 crore.

Share of HPCL and BPCL rose 5-6 percent, while ONGC declined 16 percent as crude tanked more than 30 percent after Saudi Arabia slashed prices and decided to push up production.

Technical View:

Nifty formed a bearish candle on the daily charts

If the index sustains above 10294 levels then a bounce can be expected towards 10750 levels.

In case if Nifty fails to hold on to the said level of 10294 then correction shall get extended towards 10,000 levels, suggest experts.

Considering uncertain external environment it looks prudent on the part of traders to sit on the fence waiting for stability, they say.

Three levels to track include names like 10,294, 10,751, 11000

Max Call OI: 12000, 11300

Max Put OI: 10,000, 11000

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