Today’s Market Summarised

Bears returning to the market in style. Markets saw a day of heavy sell-off as lockdown fears spread panic.

Nifty opened the day at 14,655 with a nearly 180 point gap down. After this, Nifty fell 270 points in the first 20 minutes to take support near 14,380. Fresh fall was seen ahead of noon and the index consolidated near the day-low for the rest of the day. Nifty closed the day at 14,310, down 524 points or 3.53% in the day. Nifty has respected some good supports near 14,250 for today.

Bank Nifty opened the day just below 31,700 and fell 850 points in the first 20 minutes. It followed a similar pattern to Nifty and touched a day-low near 30,500. With some last-minute recovery, Bank Nifty closed the day at 30,792, down 1656 points or 5.10%. The index has broken some clear supports on its way down, check 1-day candles.

Every sectoral index closed in the red today. Nifty PSU Bank closed 9% down, followed by Nifty Media and Realty at 7.5-8% down. Nifty Bank, Nifty Auto and Nifty Metal closed down more than 5%. Only Nifty Pharma(down 0.26%) closed flat.

Asian markets closed mixed in the day, although with no major market falling as much as we did. European markets are trading flat at the time of Indian market close.

News Picks

India overtakes Brazil as the world’s second worst-hit country by covid-19, with total cases at 13.53 million. This news, fueled by strong chances of lockdowns pushed panic into the market. 46 out of 50 stocks from Nifty 50 closed in the red.

There are reports that the Maharashtra Government may announce a 15-day lockdown post-Ambedkar Jayanti on Wednesday. 

On the political side of things, BJP’s Karnataka CM has said that the state government could impose a lockdown if the necessity arises. Is this an indication of the central government’s mood too?

Shares of Dr Reddy closed as Nifty’s top gainer, after moving up 5%. The Subject Expert Committee (SEC) has approved Dr Reddy’s application for emergency use authorisation to Sputnik V Covid-19 vaccine. 

Pharma shares including that of Cipla(up 2.19%) went up as the government banned the export of antiviral drug, Remdesivir due to rising Covid cases.

Tata Motors featured as the top-loser in Nifty 50, in a day where even the Nifty Auto index fell more than 5%. Tata Power closed down 11%.

Adani stocks came under strong profit booking, with Adani Enterprises down 11% and Adani Ports down 9.5%.

Dr Lal Pathlab continued to move up to all-time highs, moving up 6.36%.

In a move that will benefit Indian Aluminium stocks, including Nalco and Hindalco, European Union has set tariffs on aluminium products from China after finding they were being sold at artificially low prices.

Metal stocks came under heavy profit booking after last week’s rally. This is also because base metals prices fell on Monday after China’s premier said they will increase control on rising metal prices that have hurt businesses. Nifty Metal closed down 6% in the day.

Markets Ahead

Interestingly, Bank Nifty even with the sharp fall was not the worst hit index of the day. Keeping PSU Banks index aside, Nifty Metal, Nifty Media and Nifty Realty were down 6-8%. 

We had talked on Friday that financials will pull down the market if there aren’t any positive global news over the weekend. And this is what happened, with Asian markets opening in the red today and SGX Nifty falling 200 points.

If Nifty falls below 14,250 we might see even more falls. Does not look like it will be too hard to fall seeing how weak Bank Nifty is.

Lockdown bells ringing around the country are the main cause of concern for the market. As Rajiv Bajaj said in an interview today, there is confusion in the supply chains of all companies including that of Bajaj Auto.

This is what the markets hate, uncertainty. Just a reminder, Nifty has only gone up and up since the 21-day lockdown announced by PM Modi last March 24th. Markets bottomed out on March 23.

We also talked about clear opportunities that would be available in the market despite any falls. Dr Reddy gaining 5% was one such example. The stock had clear strength from the morning and shot up just ahead of market close.

The stock has broken some good resistances, and we may see it move up further in the coming days as Sputnik V finally receives approval. You can also keep a watch out for Pfizer and AstraZeneca stocks.

Also, there are reports saying that the Central government is likely to start vaccination for citizens above 30 years of age soon. 

Catch you all on The Stock Market Show tonight!