Bloodbath on D-Street: Investors lose nearly Rs 6 lakh crore, Sensex plunge 2,000 pts

Weak global cues, muted results from India Inc., zero sales from top auto manufacturers, an extension of lockdown by another 2 weeks and contraction in manufacturing activity led to profit-taking on D-Street on Monday after a sharp 14 percent rally seen in benchmark indices in April.

The market snapped its 4-day gaining streak and erased over 80 percent of last week’s gains on Monday. Benchmark indices recorded their biggest single-day fall in two weeks, CNBC-Tv18 reported.

Investors lose nearly 6 lakh crore in a single trading session. The average market capitalisation of the BSE-listed companies fell from Rs 129.41 lakh cr recorded on April 30 to Rs 123.69 lakh cr on May 4.

The S&P BSE Sensex plunged by 2000 points to break below 32000 while the Nifty50 failed to hold onto 9,300 levels towards the close of the trade.

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Let’s look at the final tally on D-Street – the S&P BSE Sensex plunged 2002 points to 31,715 while the Nifty50 was down by 566 points to close at 9293.

Sectorally, the carnage was seen in the Finance, Bankex, Metal, Consumer Durables, and Realty indices while some value buying was visible in telecom, and healthcare stocks.

Broader markets outperform as the S&P BSE Midcap index was down 4.2 percent while the S&P BSE Smallcap index was down 3.1 percent.

“Domestic markets closed with massive cuts after opening sharply lower following weak global cues and economic uncertainty caused by the coronavirus pandemic,” Paras Bothra, President of Equity Research, Ashika Stock Broking told Moneycontrol.

“Besides, muted earnings updates, a flare-up in U.S-China tensions and the extension of nationwide lockdown in India until May 17 keeping investors nervous as trading resumed after a long holiday weekend,” he said.

Top Nifty gainers include names like Dr Reddy’s, Sun Pharma, Bharti Airtel, and Cipla.

Top Nifty losers include names like HDFC, Tata Motors, Bajaj Finance, Vedanta, Hindalco Industries, and ICICI Bank were all down over 10 percent each.

Stocks & Sectors:

Sectorally, the carnage was seen in the S&P BSE Finance index, the S&P BSE Bankex, and the S&P BSE Metal index plunged more than 8 percent each.

Value buying was seen in the telecom index which was up 2.3 percent, and the S&P BSE Healthcare index was up 0.21 percent.

Volume spike was seen in stocks like Cipla, Cadila Healthcare, CESC, NIIT Tech, and UBL.

Long Buildup was seen in stocks like UBL, Torrent Power, and BHEL.

Short Buildup was seen in stocks like Chola Finance, NIIT Technologies, CESC, and LIC Housing Finance.

More than 100 stocks hit a fresh 52-week low that includes names like Godrej Industries, DCB Bank, DB Corp, and Bank of Baroda.

Stocks in the news:

Tech Mahindra | Shares plunged 8 percent after its March quarter results were below analyst estimates. The company posted a 29 percent year-on-year fall in profit at Rs 803.9 crore for the quarter ended March 2020.

Hindustan Unilever | Shares declined over 5 percent after the company reported a profit of Rs 1,519 crore in the fourth quarter, registering a 1.2 percent decline YoY due to the lockdown in the second half of March.

Bharti Airtel | Share prices jumped over 3 percent after Finnish telecom gear maker Nokia had announced signing a deal worth Rs 7,500 crore with the telecom service provider to enhance the mobile operator’s network capacity in nine circles across the country.

JSW Steel: Share price tanked almost 10 percent after the company reported 60 percent fall in output at 5.63 LT in April.

Kalpataru Power | Shares of Kalpataru Power Transmission fell almost 4 percent after company terminated agreement to sell stake in a subsidiary.

Aurobindo Pharma | Share price was up over 4 percent after the company received final approval from the US Food & Drug Administration to manufacture and market Flucytosine Capsules, 250 mg and 500 mg.

Maruti Suzuki | Share price tanked over 8 percent after the company reported zero domestic sales due to the extended national lockdown in April. However, it exported 632 units.

Bajaj Auto | Share price was down 7 percent after the company said it did not sell any two-wheelers or commercial vehicles in the domestic market in April. The company, however, shipped 32,009 two-wheeler units to overseas markets in April.

Technical View:

Nifty formed an Island Reversal formation perhaps owing to weak global cues which were accompanied with further extension of lockdown

Technically speaking indices should remain under pressure unless they close above 9732 levels. In such a scenario all pull back attempts towards 9500 levels shall be considered as an opportunity to create fresh short positions, suggest experts.

Meanwhile, some support on the downside can be expected around 9250 levels and a breach could take it towards 8900 levels

Volatility Index, India VIX surged 28% to close around the level of 44.

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