Fear of second COVID wave rattles markets; Sensex falls more than 500 points

Tracking weak global cues, Indian markets started the week on a negative note on June 15 and the fall only extended as fears of a second wave of COVID-19 infections sent jitters across global markets.

The S&P BSE Sensex plunged more than 500 points towards the close but some last-minute buying helped the index close above 33,000. The Nifty50 also held onto its crucial support at 9,800 levels.

The Sensex ended the day 552 points down at 33,228 while the Nifty50 fell 159 points to close at 9,813.

“Indian markets opened the week on a negative note, in sync with the global markets, following a risk-off attitude among investors due to concerns regarding the spread of the virus in India and globally,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

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“The infections are still high in India while there seems to be a resurgence of virus cases in China and the US. FII net inflows into equity were also negative over the previous two trading sessions, which could be a signal of reduced risk appetite. Our advice to investors remains to be cautious and stock specific.”

Sectorally, selling pressure was seen in Bankex, realty, finance, capital goods and consumer durable sectors while some value buying was seen in energy and healthcare stocks.

Top Nifty gainers included Sun Pharma, HCL Technologies and RIL, which were up more than 1 percent.

Top Nifty losers included ICICI Bank, Bajaj Finance, Axis Bank and IndusInd Bank.

Stocks & Sectors

Sectorally, the S&P BSE Energy index was up 0.9 percent followed by the S&P BSE Healthcare index that rose 0.26 percent.

Selling pressure was seen in the S&P BSE Bankex that fell 3.5 percent followed by the S&P BSE Realty index that slipped 3.04 percent. The S&P BSE Finance index was down 2.8 percent.

In the broader markets, the S&P BSE Midcap index was down 1.1 percent while the S&P BSE Smallcap index closed flat.

A volume spike of more than 100 percent % was seen in stocks like Divi’s Laboratories, BHEL, Lupin, Escorts, and Jindal Steel.

Long Buildup was seen in stocks like Cummins India, RIL, M&M, and Apollo Hospitals.

Short Buildup was seen in stocks like Page Industries, Kotak Bank, RBL Bank, and Divi’s Laboratories.

RIL, Vaibhav Global, Ruchi Soya, Lupin, Jubilant Life and Cadila HealthcareStocks were among the stocks that hit 52-week high.

Stocks in news

Reliance Industries hit a record high following two major Jio deals over the weekend and RIL’s partly paid-up shares closing at Rs 700 against the listed price of Rs 685.

Tata Motors fell over 4 percent ahead of its Q4 results. The company is likely to report a loss in the Rs 2,500-3,000 crore range for the March quarter 2020 as COVID-19-led lockdown hit businesses.

Shares of AstraZeneca Pharma jumped 7 percent after it struck a deal with Europe’s Inclusive Vaccines Alliance to supply up to 400 million doses of an experimental COVID-19 vaccine.

BHEL stock was down over 7 percent after the company reported a consolidated net loss of Rs 1,532.18 crore for the March quarter, mainly due to lower revenues and deferred taxes.

Aarti Industries share price tumbled nearly 6 percent after the company said its long-term contract with a global firm to supply agrochemicals worth Rs 4,000 crore was cancelled.

Technical View

The Nifty formed a bearish candle on the daily charts and faces resistance near the 5-day EMA.

Momentum indicator MACD is on the verge of giving a bearish crossover on the daily charts. The overall structure suggests that the index is likely to remain under pressure.

A fresh short position can be initiated below 9,726 with the near-term target at 9,544, say experts. On the other hand, 9,870-9,900 will act as an immediate resistance zone, Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas, said.

Disclaimers: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

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