Taking Stock: Carnage on D-St! Sensex plunges 1,114 points; Nifty holds 10,800

It was carnage on D-Street on September 24. The S&P BSE Sensex plunged more than 1,000 points and the Nifty tanked more than 300 points as the market ended in the red sixth day in a row in its biggest losing streak in seven months.

The S&P BSE Sensex ended the day down 1,114 points to 36,553 while the Nifty50 fell 326 points to close at 10,805, slipping below crucial support placed at 11,000-10,900.

Investors lost Rs 4 lakh crore as the average market capitalisation of the BSE-led companies fell from Rs 152.71 lakh crore on September 23 to Rs 148.79 lakh crore on September 24.

The Nifty was trading at levels last seen in July.

Selloff in global markets and rising coronavirus infections triggering a possibility of lockdowns that can delay the economic recovery led to risk-off sentiment.

“Indian benchmark indices had a gap down opening and kept losing ground as the day wore on, to finally end the day around 2.8 percent down. Markets tracked weak global cues as the uncertainty witnessed in the last few days gave way to negativity, with broader markets also underperforming,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“The uncertainty regarding an economic recovery, the unabated rise in virus infections, and today being derivatives expiry day, all contributed to the negativity. With volatility expected to be high, traders are advised to remain cautious,” he said.

Sectorally, selling pressure was visible in IT, auto, metals, banks and public sector space.

The broader markets ended a shade better. The S&P BSE midcap index was down 2.1 percent while the S&P BSE smallcap index fell 2.2 percent, marginally outperforming the benchmark indices.

Top Nifty gainers included Bharti Infratel and HUL.

Top Nifty losers included Tata Motors, Bajaj Finance and IndusInd Bank.

Stocks & Sectors

Sectorally, the S&P BSE IT index fell 4.4 percent, BSE auto index was down 3.5 percent and the S&P BSE Metal index declined 3.5 percent.

A volume spike of more than 100 percent was seen in stocks like SBI Life, Indiabulls Housing Finance and Vedanta.

Long buildup was seen in stocks like Idea, Vedanta and Chola Finance.

Short buildup was seen in stocks like SBI Life, Motherson Sumi and Lupin.

Nearly 100 stocks on the BSE hit their fresh 52-week high. These included Apollo Hospitals, Route Mobile and Majesco.

Technical View

The Nifty formed a Long Black Day kind of pattern on the daily chart. It closed above 10,800.

The bears were in control of the index on the last trading session of the September expiry as every small bounce was being sold to drag it down by more than 300 points.

The index has been making lower highs-lower lows on the daily scale for the last six trading sessions and holding well below 50-DEMA with a negative crossover on the weekly scale.

“Now till it sustains below 11,000 zones, any small bounce could be sold for further weakness towards 10,650-10,600 zones while on the upside, the medium-term hurdle is shifting lower to 11,111-11,250 zones,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited said.