Taking Stock: Investors book profits as Sensex breaks below 30,000

Profit-taking after a massive rally seen in the previous trading session pulled the S&P BSE Sensex below 30,000 while Nifty50 also gave up 8,800 levels on April 8.

Let’s look at the final tally on D-Street – the S&P BSE Sensex fell 173 points to 29,893 while the Nifty50 closed 43 points lower at 8,748.

Sectorally, the selling pressure was visible in Realty, IT, Consumer Durables, and Bankex while buying was seen in Healthcare, auto, as well as Utilities.

Broader markets outperformed as the S&P BSE Midcap index was up 1.9 percent while the S&P BSE Smallcap index closed 1.86 percent higher.

Although news reports related to a next stimulus package lifted sentiment but muted global cues, as well as uncertainty around COVID-19, dampened the sentiment. Also, India could be looking at extending the lockdown which could hurt economic activity.

"Markets gave up gains, following a negative opening in the European Markets and uncertainty regarding the spread of Covid-19 infections. Markets are also uncertain as to the government response after the official 21-day lockdown expires on April 14,” Vinod Nair, Head of research at Geojit Financial Services told Moneycontrol.

“Some states are looking to extend the lockdown and some are for withdrawing it in a phased manner. The longer the lockdown stays, more the impact on the economy and companies,” he said.

Top Nifty gainers include names like NTPC, Cipla, Sun Pharma, Bharti Infratel, and Vedanta.

Top Nifty losers include names like Hindalco, Shree Cements, Titan Company, and TCS.

Stocks & Sectors:

Sectorally, the action was seen in the S&P BSE Healthcare index which was up 3.8 percent followed by the S&P BSE Auto index that was up 1.9 percent, and the S&P BSE Utilities closed 1.8 percent higher.

On the other hand, profit taking was seen in the S&P BSE Realty index that was down 1.6 percent, followed by S&P BSE Consumer Durables index that fell 1.4 percent, and IT index fell 1.4 percent.

Volume spike of over 100% was seen in stocks like Cadila Healthcare, Federal Bank, Petronet LNG, and Motherson Sumi.

Long Buildup was seen in stocks like Cadila Healthcare, Torrent Pharma, TVS Motor, Biocon, and Shriram Transport Finance

Short Buildup was seen in stocks like Ramco Cements, HDFC Bank, and Tata Chemicals etc. among others.

Beating the muted sentiment there are over 40 stocks that have hit fresh 52-week high which include names like Abbott India, Nestle India, GSK Consumer Health, DR Reddy’s Laboratories, Alkem Laboratories, and Torrent Pharma etc. among others.

Stocks in news:

West Coast Paper Mills share price got locked at 5 percent upper circuit on April 8 after the company started production, albeit partially, at its Dandeli unit.The stock finally closed with gains of over 3 percent.

Shares of Sudarshan Chemical Industries rose nearly 4 percent on April 8 after India Ratings revised its outlook on the company to "positive" from "stable".

Cadila Healthcare share price surged nearly 12 percent on BSE on April 8, a day after the company said it received approval from the US drug regulator for Perphenazine tablets.

Galaxy Surfactants share price rose over 4 percent on April 8 after the company partially resumed the operations.

Shares of Adani Green Energy jumped almost 5 percent on BSE on April 8, a day after the company said it received Rs 3,707 crore for the formation of the joint-venture (JV) with a French firm TOTAL.

Technical View:

The Nifty formed a Shooting Star kind of pattern on daily charts

The index witnessed profit taking around 9000 levels

In the next trading session if this counter slips below 8650 levels then weakness will be confirmed and in such a scenario it shall ideally resume downswing with initial targets present between 8550 – 8360 levels.

Strength in the index shall not be expected unless it closes above 9000 levels.