Financials drag market; Sensex plunges 600 points, Nifty holds 10600

Profit booking hit D-Street on July 14, a day after the Nifty50 re-tested its crucial resistance level of 200-Days Moving Average (DMA) placed around 10,881. The index slipped nearly 200 points while the S&P BSE Sensex fell over 600 points dragged by losses in financials.

Let’s look at the final tally on D-Street – the S&P BSE Sensex plunged 660 points to 36,033 while the Nifty50 was down 195 points to close at 10,607 to hit a 2-week low.

Weak global cues, rise in state-level lockdowns, rising COVID-19 infections across the globe, and muted June quarter results are some of the factors that weighed on sentiment.

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“The markets exhibited a high correlation with the global markets and with the virus infections hitting day highs in India, the uncertainty caught up with the markets. Global markets were weak following rising infections in US and US-China tensions being back in the news,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“Indian markets were also worried about the increasing number of localized lockdowns which would in turn again slowdown the predicted recovery for businesses. Volatility is expected to remain and investors are advised to be cautious and be stock specific in their trades,” he said.

Inflation data which came out earlier today highlighted a severe demand crunch. Indian Wholesale prices fell by -1.8% YoY (higher than expectations) in June.

Sectorally, selling pressure was visible in banks, metals, power, finance, and auto space while some buying was seen in the telecom and healthcare stocks. The Nifty Bank closed 3.1 percent lower at 21,392, weighed down by losses in RBL Bank, IndusInd Bank, Axis Bank, SBI, ICICI Bank, and HDFC Bank.

On the broader markets front – the S&P BSE Mid-cap index fell 0.95 percent while the S&P BSE Small-cap index was down 0.93 percent – outperforming the benchmark indices.

Top Nifty gainers include names like Bharti Airtel, Titan Company, and Dr Reddy’s Laboratories.

Top Nifty losers include names like Eicher Motors, ZEE Entertainment, Axis Bank, and IndusInd Bank etc. among others.

Stocks & Sectors:

Sectorally, the S&P BSE Bankex fell 3.06 percent, followed by the S&P BSE Power index which was down 2.7 percent, and the S&P BSE Finance index plunged 2.5 percent.

Mild buying was seen in the Telecom, and Healthcare indices.

Volume spike of more than 100% was seen in stocks like GMR Infra, SBI Life, Dr Reddy’s, Tata Chemicals, and BHEL.

Long Buildup was seen in stocks like Biocon, and Sun TV.

Short Buildup was seen in stocks like RBL Bank, Ramco Cements, and MindTree.

More than 100 stocks hit a fresh 52-week high that include names like Dixon Tech, L&T Infotech, DR Lal Pathlabs, BASF India, and IOL Chemicals.

Stocks in news:

Reliance Industries closed with a cut of over 1% ahead of the AGM on Wednesday

Eveready Industries closes at upper circuit of 10% after Burmans raised holding by 8.5% to ~20%

MindTree slips over 3% after Q1 earnings see a miss on revenue

Vodafone Idea falls 4% after TDSAT refused to stay on the TRAI order

Biocon stock jumped over 5 percent after the company said it will launch a biologic drug for the treatment of moderate to severe COVID-19 patients at a price of around Rs 8,000 per vial.

BF Utilities’ shares jumped 10 percent after ace investor and billionaire Radhakishan Damani acquired 1.3 percent equity stake.

Bharat Heavy Electricals stock shed over 8 percent after research house Citi has downgraded the stock to ‘sell’.

Yes Bank share price tumbled over 5 percent with the scrip tumbling over 22 percent in the last 3 days.

Technical View:

Nifty formed a bearish candle on the daily charts

It has broken its rising support trend line by connecting all the recent swing low which is a bearish sign

It has also given a consolidation break down by holding below its previous weekly support of 10650 zones.

Mechanical indicator RSI has given a negative crossover and showing a sign of profit booking decline, Chandan Taparia of Motilal Oswal Financial Services Limited said.

“Now, till it holds below 10700 zones, weakness could be seen towards 10500-10450 zones while immediate hurdle exists at 10750 then 10850 zones,” he said.

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