Today’s Market Summarised

Covid-19 fears forcing the markets to open with a huge gap-down. All indices slowly moved up through the day, and it was a general trending day after 9:30 am.

Nifty opened the day at 14,314 and fell nearly 130 points in the first 15 minutes. After taking 14,200 as support, all sectoral indices started to move up. From here there was no looking back. IT stocks including Infosys helped push the index up along with some last-minute power from the HDFC twins and ICICI Bank. Nifty closed the day at 14,359, down 258 points or 1.77%.

Bank Nifty also had a similar story, but it was less bullish than Nifty in reversing. After opening with a gap-down at 31,033, the index fell more than 600 points before starting to move up. The slow movement was accelerated near the end with some sharp moves from HDFC Bank and ICICI Bank. Bank Nifty closed the day at 31,208, down 769 points or 2.40% for the day.

Only Nifty Pharma managed to close in the green today(up by nearly 0.2%). Nifty PSU Bank(down 4.15%), Nifty Realty(down 4%), Nifty Auto(down 2.82%), Nifty Media(down 2.64%) were the worst-performing indices.

Asian markets closed flat in the day. European markets are also trading flat. The bearishness in our market was completely localised.

News Picks

PM Modi day was filled with back-to-back meetings, to take review of the Covid-19 situation in the company. He will interact with leading doctors from India via video conference at 4:30 pm. At 6 pm, the Prime Minister will hold a meet with top pharma companies in the country

Jubilant Pharma has developed an oral formulation of the much-needed antiviral drug Remdesivir. The stock closed up by 6%.

A 6-day lockdown announced in Delhi. Essential services will continue during the lockdown in Delhi. A severe shortage of ICU Beds and Oxygen forced the Delhi government to take this decision, said CM Arvind Kejriwal.

The Supreme Court has stayed further proceedings in Amazon-Future-Reliance. The matter will be finally heard by the court on May 4. Shares of Reliance closed near a good support zone of Rs 1,900.

Caplin Steriles received USFDA approval for Milrinone Lactate Injection, which is used against the short-term treatment of heart failure. The parent company Caplin Point Laboratories closed up by more than 5%.

Dr Reddy featured in Nifty’s top-gainers list, showing the bullishness in Pharma stocks. Cipla also closed in the green.

Shares of AstraZeneca closed 3.5% up as the Finance Ministry cleared Rs 3,000 crore credit for Serum Institute of India, which manufactures the vaccines.

Borosil Renewables approved an expansion plan to raise its production capacity of solar glass by an additional 1000 tonnes per day. Shares closed more than 4% up in the day.

Two-wheeler stocks remained bearish in the day as CLSA says they expect two-wheeler sales recovery to underperform. HeromotoCo and Bajaj-Auto closed down more than 3%.

Markets Ahead

After opening with huge gap-downs, every index except Nifty Realty and Nifty PSU Bank closed above their opening levels.

This happened even with all the negative local cues. Remember that HDFC Bank had posted good results, with profits up more than 18%. The stock gained more than 2% from today’s open. Investors are also expecting other major private banks to post good results.

The asset quality of India’s largest private bank also impressed analysts, and we will have to see if this can be maintained.

The lockdown measures in Delhi today saw no further reaction in the market hours today. Himachal Pradesh CM has said they have no plans for a lockdown.

But I do agree with Maruti Chairman RC Bhargava. He said aftermarket hours that a blanket ban on movement and economic activity will be overkill. “Pandemic needs a state-by-state approach. This lockdown may be the last nail for many struggling businesses.”

Let us see what approaches that the Central Govt takes to control the current situation. Nifty falling below 14,150 this week may see a journey towards 14,000 and 13,850 soon. If all goes well, the index will see a retracement back up to 14,500 and above.

Private Banks having more weightage in Bank Nifty will keep it strong for a few days. Hopefully, 30,000 will be taken as strong support in the index.

Catch you all on The Stock Market Show tonight!