Today’s Market Summarised

Sharp fall across the market help traders enjoy but worries investors. 

Nifty opened the day at 14,711 with a gap-up. A quick fall of 150 points in the index was almost fully recovered with a slow move upwards. But exactly at 1 pm, the index started falling. Again a 100-point fall which Nifty again tried to recover. 

The next fall was even bigger. After falling another 140 points the index closed near the day-low. Nifty closed the day at 14,496, down 137 points or 0.94%.

Bank Nifty opened the day at 32,725 and was again highly volatile. After taking 32,500 as a support in the morning, the index of Banks tried to break 33,000 level with the help of PSU Banks. With reports of moratorium extension requests, Bank Nifty fell 800 points from the day high and closed the day at 32,270, down 195 points 0.60%.

All sectoral indices except Nifty PSU Bank(up 3.44%) closed in the red. Only Nifty Pharma(down 2%) closed more than 1% down.

Asian markets remained mixed, with many being closed after Labour Day. European markets are also trading mixed, but don’t seem to be affected by Nifty’s fall.

News Picks

The IPL has been suspended as more players in the tournament test positive for Covid-19. With the impact IPL has on the Indian economy, it was no surprise that Nifty fell when this was announced. Possibly it was only now some investors understood the seriousness of the Covid situation in the country.

In other news, Bank Nifty’s fall near the end of the day was due to Bankers requesting RBI to allow a moratorium for 3 months, especially to retail & MSME (Micro, Small and Medium Enterprises) borrowers. Another moratorium request does not look good for the banking industry.

So, IPL suspension and moratorium news triggered the fall in Nifty today.

Fuel prices have been raised for the first time since February 23, as election results are now out. Energy stocks like ONGC, BPCL, HindPetro and GAIL gained some momentum and closed among the top gainers of the day.

Also, oil giant Saudi Aramco reported a 30% jump in net income. The company reported that its net income rose to Rs 1.6 lakh crore in the first three months of the year.

UK and India announce $1.4 Billion(~Rs 10,000 crore) private sector investments including investments by Serum Institute, Infosys and Mphasis

Dixon, Info Power, Micromax, Syrma, Orbic and many other companies have filed applications under the PLI scheme for IT hardware.

Alembic Pharmaceuticals posted their Q4 consolidated net profit at Rs. 251 crores, up 11% YoY but a 20% fall compared to last quarter. Q4 revenue rose to Rs 1,280 crores vs Rs 1,207 crores last year, up 6% YoY. The stock price closed more than 2% up in a day when most Pharma stocks saw heavy selling.

Auto components major Motherson Sumi Systems has completed the acquisition of Bombardier’s electrical wiring interconnection systems (EWIS) business in Huehuetoca, Mexico. The stock was 4.5% up in the morning but closed flat.

Tata Chemicals fell 9% after reporting an 85% fall in net profits. The company also said that they are looking into a new Lithium-ion business as orders return back to normal.

Interestingly, Tata Consumer fell 4% after seeing sell-off near its all-time high again.

IDBI Bank reported a nearly four-fold jump in its standalone profit after tax to Rs 512 crore in the March quarter. The stock was up by 4% at one point in time and later fell down along with Nifty. 

All PSU banks were having a blast in the day. PNB closed 8.5% up in the bearish market.

SBI Life continues the rally after Q4 results and is up by 2.5%, just like Marico who closed up 3.5% today.

Shares of Angel Broking hit 20% Upper Circuit the closed 12% up. This rally was in expectation of good Q4 results to be announced today. Tata Steel BSL also closed 14% up.

Markets Ahead

From 10 am to 1 pm, Nifty was consolidating in a 70-point range and Bank Nifty in a 250-point range. And just after this, market fell sharply.

More interesting was despite this fall, PSU Banks still remained in the green. So the concerns regarding the moratorium are not really strong. Bank Nifty falling 800 points intraday is not extra-ordinary these days. This is why I feel the index might take 32,000 as a support this week and consolidate.

But keep watching the 32,000 support. Yesterday there was a false breakdown when Kotak Bank fell during the results announcement. Interested to see if it will hold up in the coming days. 

Reliance closed another 2% down in the day, continuing yesterday’s fall. Contributed the most to Nifty’s fall in the day.

While we expected IT and Pharma to perform well, they did not. Still, Tata Elxsi was up nearly 15% in the day and congrats if you caught the move. Happiest Minds also hit an all-time high in the day.

Now looking into more movement from SAIL to move up in the next few months. Has closed at Rs 130 after a multi-year breakout. But don’t get trapped in a high price in between the volatility!

Markets are continuing on the sell on rise mode, with a heavy resistance being seen at 15,000. Bulls can wait for another week or maybe even more.

Stay safe, stay home if you can. Keep looking at charts and improve your skills.

Catch you all on The Stock Market Show tonight!