Profit booking on FO expiry day, Sensex falls over 300 points

Weak global cues, accelerating coronavirus cases and July F&O expiry weighed on investor sentiment on July 30. The S&P BSE Sensex dropped 335 points to close at 37,736 while the Nifty50 slipped 100 points to end the day at 11,102.

The Nifty50, which opened at 11,254, rose toward 11,300 levels but then the bears took control and pushed the index below 11,100. The index finally closed at 11,102 down nearly 1 percent.

“Global markets faded as a status quo in policy by the US Fed Reserve failed to offset tepid business outlook and resurgence in virus cases around the world. Indian markets also closed in the negative, in spite a positive opening,” Vinod Nair, Head of Research at Geojit Financial Services told .

“Unlock 3.0 failed to enthuse, as earnings results took priority and markets turned volatile in the expiry session. Financials led the losses for the benchmark index. Investors will be looking at the commentary emerging from meeting between the Prime Minister and key economic regulators.

Stock-specific action is expected to continue.”

From the expiry perspective, the Nifty ended the July series at 11,102 with good gains of nearly 8 percent on expiry basis. It formed a bullish candle for the second consecutive expiry.

Sectorally, action was seen in healthcare, IT, and realty stocks while profit-booking was visible in the public sector, oil & gas, and telecom. The Nifty Bank closed nearly 2 percent lower at 21,646.

On the broader markets front, both S&P BSE Midcap index and S&P BSE Smallcap indices closed with losses of 0.4 percent each.

Top Nifty gainers included Infosys, Wipro, Sun Pharma, and Dr Reddy’s Laboratories.

Top Nifty losers included HDFC, IOC, IndusInd Bank, and BPCL.

Stocks & Sectors

Sectorally, the S&P BSE Healthcare index rose 2.01 percent followed by the S&P BSE IT index, which gained 0.6 percent.

Profit-taking was visible in the public sector that fell 2.5 percent followed by the S&P BSE Oil & Gas which was down 2.2 percent and the S&P BSE Telecom index ended 2 percent lower.

Volume spike of more than 100 percent was seen in HDFC Life, Glenmark, Idea Cellular and Indiabulls Housing Finance.

Long buildup was seen in stocks like Dabur, Sun Pharma, and Glenmark.

Short buildup was seen in stocks like IndusInd Bank, Shree Cement, and M&M.

More than 100 stocks on the BSE hit their fresh 52-week high. These included Dr Reddy’s, Divi’s Laboratories, TCS, MindTree and Infosys.

More than 200 stocks on BSE were locked in the upper circuit. Among them were JP Power, Best Agrolife, TCI Industries and Heritage Foods.

Ruchi Soya, Muthoot Capital, 5Paisa Capital and SAR Auto Products were among 400 companies on the BSE that were locked in the lower circuit

Stocks in news

Housing Development Finance Corporation (HDFC) stock shed over 3 percent after the company’s net profit went down 4.7 percent at Rs 3,051.5 crore against Rs 3,203.1 crore YoY.

Laurus Labs stock price jumped over 4 percent after the company’s Q1 YoY net profit rose to Rs 171.8 crore versus Rs 15.1 crore and revenue was up 77 percent at Rs 974.3 crore against Rs 550.6 crore.

Karur Vysya Bank share price rose 10 percent after net profit jumped 44.7 percent at Rs 105.5 crore against Rs 72.9 crore YoY.

Mahindra Logistics share price was down more than 4 percent after the company reported a net loss at Rs 15.8 crore against a profit of Rs 18.6 crore YoY.

Dr. Reddy’s Laboratories stock jumped over 4 percent as revenue from operations during Q1FY21 stood at Rs 4,418 crore, up 15 percent YoY. Gross margin came at 56 percent in Q1FY21, up 430 bps over the previous year.

SRF share price fell over 4 percent after net profit slipped 6.4 percent to Rs 177.1 crore against Rs 189.2 crore YoY.

Technical View

The Nifty formed a bearish candle on daily charts. It closed below the 5-Day EMA.

If the Nifty slips below 11,084 in the next trading session, then initially the corrective swing shall get extended towards 11k levels

A close below 11,000 will take the index towards 200-day moving average whose value is placed around 10861 levels.

“Traders are advised to adopt a wait-and-watch kind of approach in the next session without attempting a trade. However, positional shorting opportunity can be considered if the Nifty is trading below 11k levels in the last 15 minutes of the session,” Mazhar Mohammad of said.