Today’s Market Summarised

Nifty opened the day with a gap-down and what a day it was after this. 15,000 being a crucial zone saw rejection from buyers. And the index started falling. 14,900, 14,800 and 14,750 acted as temporary supports for the index. But this turned out to be not enough. Nifty went on to touch a day low of 14,631 in the day. That is a movement of nearly 400 points from high to low for the index. Nifty closed the day at 14,675, down at 306 points or 2.04%, quite near to its day low.

Bank Nifty opened the day at 35,842 and tried to go up with the power of some private banks. From day high to the low, Bank Nifty fell nearly 1,000 points. Only HDFC Bank and Kotak Bank(which were top-losers for many days) closed in the green in Bank Nifty. Bank Nifty closed the day at 35,257, down 584 points or 1.63%. It was definitely not as bearish as Nifty today.

Metals were the sector that performed okay for the day, in fact, it was the only sector to close in green. Media, IT and Realty indices in NSE fell the most with a nearly 3% fall each.

European markets are trading in the red and falling further. Asian markets have closed mixed for the day.

News Picks

Shares of Adani Ports remained strong through the day. The company had last day formed a subsidiary to carry out the business of dredging and sale material. It closed as Nifty’s top gainer for the day. It is now the 27th largest company in our country.

Metal stocks shined in the day as Chinese industries started opening up after the Chinese New Year. Hindalco, JSWSteel and Tata Steel led the rally in Nifty 50.

With copper prices going up in the global markets, Hindustan Copper shares jumped nearly 15% in the day. Hindalco also jumped, being a producer of copper.

Shares of Torrent Power hit a fresh 52-week high after the company emerged as the highest bidder for the crucial Dadar & Nagar Haveli and Daman & Diu discoms.

With new restrictions in Mumbai coming up on theatres, shares of PVR and Inox fell nearly 6% each.

With the Rupee reaching an 11-month high against the dollar, export-based stocks including IT and Pharma stocks fell sharply over the day. Only 1 stock from the IT closed in the green. No share from pharma closed in the green.

Shares of Amara Raja Batteries gained nearly 3% as the company said it has opened the country’s first technology hub to develop lithium-ion cells, at its Andhra Pradesh facility.

Shares of Jubilant FoodWorks gained over 5.5% after acquiring Fides Food Systems from the Netherlands. The company had also announced its expansion to many countries last Friday.

With Ford putting all talks with M&M on hold, shares of the Indian automaker fell nearly 5% for the day to be Nifty’s top-loser.

Markets Ahead

Nifty has broken key supports and fallen sharply. We had discussed 2 weeks ago how the index may fall to 14,700 ranges if it closes below 15,000. And I was expecting a fall today as well. But definitely not by this magnitude. 

14,800 and 14,750 were broken easily and this is when we see the effect of gravity. The index finds it easier to move down than to go up. And while falling down there need only be just such technical reasons. Like, imagine if you are falling from a hill, you will only keep falling harder as the fall continues. Even if you do stop and get up, the journey back up will be a bit hard.

If US markets are also going in the red tonight, I see further correction in the market. Nifty may even go to 14,500 soon. So what is the learning you can get from the market? Supports and resistances are meant to be broken. And when they are broken, you can expect a good movement.

India VIX was very high in the fall today, indicating that this is a proper fall. In fact, it has closed at the highest level in the last 6 months.

There are no cues for the economy this time like we had the Union Budget in the last fall. The only possible cue this time is maybe the US stimulus. Otherwise, after the fall is done, we may see just a small pullback and consolidation in the index.

Stock specific moves will continue, and trading opportunities will always exist in the market. Just have to move along with the trend.

Catch you all on The Stock Market Show tonight!