Indices hit fresh 3-yr low as Nifty breaches 9,000; support likely at 8,555

Indian market reversed in the last hour the gains it had made during the day on March 17 tracking muted global cues. Nifty broke below 9,000 levels, while Sensex breached 31,000 as both the indices hit fresh 3-year low.

Let’s look at the final tally on D-Street on March 17 – the S&P BSE Sensex plunged 810 points to close at 30,576, while the Nifty50 plunged 230 points to end at 8967.

Sectorally, selling pressure was evident in banks, telecom, IT, realty as well as consumer durable indices while some buying was seen in FMCG stocks. The Nifty Bank also closed at a 3-year low while the Nifty Midcap index closed at a 4-year low.

On the broader market front, the S&P BSE Midcap index fell 1.8 percent while the S&P BSE Smallcap index was down by 2.2 percent.

Experts are of the view that investors should wait for some more consolidation before initiating fresh positions. Indian market is largely mimicking global mood, and the next big support is placed at 8,555 which is the swing low of Friday, 13 March.

“After trading in the positive for the majority of the day, the indices turned red during the last hour of trading, with selling mainly seen in Financials. European markets and Dow futures added to the negativity,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“Covid-19 showed no signs of abatement and with Central Banks’ monetary policy actions having limited impact, calls were out for more actions to contain the spread of the virus,” he said.

Top Nifty gainers include stocks like HUL, Asian Paints, Eicher Motors, and YES Bank.

Top Nifty losers include names like UPL, IndusInd Bank, ICICI Bank, and ZEE Entertainment.

Stocks & sectors:

Sectorally, selling pressure was seen in the S&P BSE Bankex which was down 4.4 percent, followed by the S&P BSE Telecom which fell 3.4 percent, and the S&P BSE IT index was down 2.9 percent.

The S&P BSE FMCG index was up 1.2 percent led by gains in LT Foods, Triveni Engineering, Ruchi Soya, and Kwality, etc. among others.

Volume spike was seen in stocks like Godrej Consumer Products, Sun TV, TVS Motor, ZEE Entertainment, and Ujjivan Financial Services.

Long Buildup was seen in stocks like TVS Motor Company, MRF, and Power Grid, etc. among others.

Short Buildup was seen in stocks like Ujjivan Financial Services, HDFC Bank, Hindalco, and Infosys, etc. among others.

More than 500 stocks were locked in lower circuit on the BSE that include names like Orissa Minerals, Affle India, IRCTC, IOL Chemicals, Bajaj Healthcare, and Abans Enterprises, etc. among others.

While there are nearly 600 stocks on the BSE that hit a fresh 52-week low that include names like ZEE Entertainment, TTK Prestige, Tide Water, TeamLease, NIIT Technologies, United Breweries, and Piramal Enterprises.

Stocks in the news:

Zee Entertainment: Shares of Zee Entertainment Enterprises plunged 20 percent after Enforcement Directorate issued fresh summons to promoters. ED asked Subhash Chandra of Essel Group to appear on March 18. The stock closed at an 8-yr low despite clarification on ED summon to Subhash Chandra, said CNBC-TV18 report.

Grasim Industries: Grasim Industries’ share price slipped 3 percent on March 17 after CCI imposed a penalty on the company.

YES Bank: YES Bank share price rose 59 percent on March 17 after rating agency Moody’s upgraded its ratings with a positive outlook.

Delta Corp: Delta Corp share price declined almost 10 percent on March 17 after the company closed its casinos in Sikkim to combat the outbreak of COVID-19.

Technical View:

Nifty formed a bearish candle on the daily charts

Nifty took ‘u-turn’ in last 1 hour by giving up all its intraday gains from day’s high of 9403 levels

If bulls fail to recover and manages a sustainable close in the next one or two trading sessions then Nifty can initially head to retest recent lows of 8555 levels.

Below 8555 levels, one should prepare to see much lower levels with logical targets present around 7946.

Investors and traders should wait for some prolonged consolidation phase at lower levels

Three levels: 8555, 8915, 9403, 9500

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