Crude shock leads to bloodbath on Street; Sensex plunges 1,000 pts

It was a crude shock for the market. Weak global cues and muted March quarter earnings also led to a knee-jerk reaction on D-Street. The S&P BSE Sensex plunged over 1,000 points while the Nifty50 closed below 9,000 levels.

US oil futures continued to trade in negative territory on April 21, after closing down nearly $ 40 on April 20 in their first-ever sub-zero dive, said a Reuters report. Global benchmark Brent crude also fell sharply to $ 20/ barrel in response to the collapse of demand following reduced economic activity, said a Reuters report.

Let’s look at the final tally on D-Street – the S&P BSE Sensex plunged 1011 points to 30,636 while he Nifty50 closed 280 points lower at 8981.

Investor wealth fell over Rs 3 lakh crore in a single trading session on Tuesday. The average market capitalisation of BSE-listed companies fell from Rs 123.72 lakh cr recorded on April 20 to Rs 120.37 lakh cr as on April 21.

“After the US crude oil crash, Indian markets, in sync with Global markets traded negatively, as the extent of the impact of lockdowns and the global slowdown is becoming evident,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“Corporate earnings have also been impacted by the pandemic related shutdowns. Post earnings management guidance has also not given a clear indication about the recovery path. Earnings results will be in focus for the future course of the company business,” he said.

Sectorally, the telecom and healthcare stocks saw some buying while the selling pressure was visible in Bankex, Auto, as well as metals.

Broader markets outperformed as the S&P BSE Midcap index fell 2.7 percent while the S&P BSE Smallcap index was down 2.9 percent.

Top Nifty gainers include names like Hero MotoCorp, Bharti Airtel, Dr Reddy’s Laboratories, and Britannia Industries.

Top Nifty losers include names like Axis Bank, ZEE Entertainment, ICICI Bank, Bajaj Finance, and IndusInd Bank.

Stocks & Sectors:

Sectorally, the S&P BSE Telecom index rose 1.7 percent supported by gains in Bharti Airtel, Bharti Infratel, and Reliance Communications.

In the pharma space, the S&P BSE Healthcare index rose 1.3 percent with Dr Reddy’s Laboratories, Divis Laboratories, and Laurus Labs hitting fresh 52-week highs.

Profit-taking was seen in the S&P Bankex which plunged more than 5 percent weighed down by losses in IndusInd Bank, RBL Bank, ICICI Bank, Axis Bank, and SBI.

Other sectors that remained under pressure include names like metal, auto, finance, and capital goods stocks.

Volume spike of over 100% was seen in stocks like Divi’s Laboratories, Cipla, Lupin, Dr Reddy’s, Britannia Industries, and Aurobindo Pharma.

Long Buildup was seen in stocks like Godrej Consumer Products, Glenmark, and Aurobindo Pharma.

Short Buildup was visible in Ujjivan Financial, SAIL, Britannia, and Tata Motors.

More than 30 stocks hit a fresh 52-week high that includes names like Dr. Reddy’s Laboratories, Divi’s Laboratories, Sun Pharma, Laurus Lab, and Bajaj Healthcare, etc. among others.

Stocks in the news:

Aurobindo Pharma | Share price surged 20 percent after US health regulator decided that the inspection classification of company’s injectable formulation manufacturing facility at Hyderabad is voluntary action indicated (VAI).

Greenlam Industries | Share price of Greenlam Industries jumped over 4 percent after the company resumed its manufacturing operations at its manufacturing unit in Behror, Rajasthan.

Jubilant Life Sciences | Shares gained 4 percent after ace investor Rakesh Jhunjhunwala increased his stake in the pharma company to 4.41 percent in the quarter ended March 2020.

ACC | Shares of cement maker fell 3 percent after global investment firm Morgan Stanley remained bearish on the stock. While having underweight call on the stock with a target price of Rs 930, the brokerage house said it believes share price will fall over the next 60 days as the realisations will see weaker trends than peers.

Morepen Laboratories | Share price surged 10 percent after the company received license to manufacture Hydroxychloroquine (HCQ) from State Drug Controller, (HP) last week for its Baddi plant in Himachal Pradesh.

Infosys | Share price slipped nearly 4 percent after the company reported its Q4 numbers. The company has reported a profit of Rs 4,321 crore for the quarter ended March 2020, a 3.1 percent degrowth compared to December quarter 2019.

ICICI Bank | Share price tanked over 8 percent after the private lender has a $ 100 million exposure to Singapore-based oil trading company Hin Leon Trading Pte, which has filed for bankruptcy protection in the Singapore courts.

Technical View:

The Nifty formed a bearish candle on the daily charts

A close below 8900 could extend the downswing towards 8821-7500

While a close above 9230 could put bulls back in control

For the time being, positional traders with high-risk appetite should remain short with a stop above 9390 and look for bigger targets whereas intraday traders should consider fresh shorts below 8900 levels for a modest target of 8820 levels with a stop above 9000 levels, suggest experts.

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