Today’s Market Summarised

Nifty had a tough day today after opening flat at 11,942. The day’s high was at the opening level, and this was the first sign that things would not go well. Bearishness in the auto sector was another sign for Nifty’s fall today. Then, the news from Spain caused European markets to panic, and in turn, pulled down Nifty as well. After consolidating between 9.30 am and 11 am, the index fell sharply. The 11,800 support was also broken smoothly. After touching a day low of 11,711, Nifty 50 closed the day at 11,767.75, down 162.60 points, or 1.36%.

Bank Nifty opened the day at 24,577 and kept falling from there. Similar to Nifty, it consolidated till 11 am to fall further and take support at 23,867 at around 2 pm. After this, Bank Nifty regained to close at 24,075, down 402 points, or 1.65%.

Every major sectoral index fell steeply today, Nifty Metal and Nifty Auto were the worst performers while Nifty FMCG closed just a bit in red.

Asian markets are mixed. European markets are trading in red, at the time of writing. 

News Picks

As Amazon won an interim relief in the Reliance-Future acquisition deal, shares of Reliance fell today to Rs 2,034.90, down 3.70%. Reliance has said that the deal is completely enforceable under Indian Law. Let’s see how this story pans out.

Shares of SBI Life closed up 1.32% at Rs 781 after the company announced its Q2 result in market hours. Net profit is up 123% YoY to Rs 290 crores. Premium income rose 27% to Rs 12,858 crores.

Kotak Mahindra Bank announced its results during market hours and caused a jump in its stock price. Share prices of the company went up to Rs 1,410.55, up 1.99%. Yesterday there was an apparent fake news that Kotak Mahindra Bank was set to takeover IndusInd Bank, which was denied by Indusind. Shares of IndusInd jumped to Rs 616.90, up 1.44% for the day. Provisions for bad loans have been drastically reduced, compared to last quarter in a time where bad loans are expected to occur.

Profit booking caught up to the metal sector finally after Nifty Metals’ rally last week. Hindalco JSWSteel, JindalStel, and SAIL featured among the top losers for the day. The fall in profits of JSWSteel for Q2 FY21 might have been a strong reason for this fall.

Two wheeler stocks fell sharply after the festive season failed to boost vehicle demand. Dealers say 2-wheeler Dussehra sales weak and that Navaratri sales down 15% YoY. 4-wheeler sales are said to be doing better. Auto stocks crashed for the day and may fall further in the coming sales. Last day, we had predicted such a situation may happen on marketfeed. You can check out the list of top-losers below.

Markets Ahead

With the market closing below 11,800 with a big red candle, things are not looking good for Nifty. The results season is expected to cause such volatility in the market, and as an example you can take the case of steel sector. As we reported last week, dealerships around the country are reporting a glut of extra inventory with manufacturers pushing out more vehicles but retail demand not keeping up. The curfews imposed in Spain have caused European markets to fall and this was expected to bring down Nifty as well. And obviously, the fall of Reliance led to the fall in Nifty.

The weekend did change a lot of things.

Hope you will all tune in to The Stock Market Show tonight. Keep watching this space for more.