Why Sensex, Nifty suffered their biggest loss in a month
- There is some Covid fear in the air again, say analysts
- In the Sensex pack, all shares closed in the red, barring Asian Paints and PowerGrid
Indian stock markets fell sharply today, dragged down by financial stocks. The global market sentiment was also weak amid worries over the economic impact from a continued surge in coronavirus cases. Sensex fel871 points to 49,180 while the broader Nifty 50 index closed down 1.8% at 14,549.40, with both the indices seeing their biggest one-day percentage fall since February 26.
Here are 10 things to know about today's market performance:
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1) "The main reason for the fall today included rising cases of Covid-19 in India and across the globe, which could delay the economic recovery. This is also evident from the fall in crude prices over the last few days," said Deepak Jasani, Head of Retail Research, HDFC Securities.
2) "There is some Covid fear in the air again. The market seems doubtful that the vaccination race against the third pandemic wave can be won quickly," he said.
3) "Volumes on the NSE were below recent averages. Nifty is close to 14468 which is the make or break level for the near term. Fall with lower volumes suggest that bottom fishers are staying away while sellers are hopeful of a bounce in the near term. On rises, 14638 could provide resistance," he said.
4) India has detected a new "double mutant variant" of the novel coronavirus, the health ministry said today, adding to concerns as country saw the highest single-day tally of new infections and deaths this year.
5) The Nifty bank index and finance index fell 2.6% and 2.1%, respectively, while the metals index dropped 3.2%.
6) "In India, the Supreme court judgement on NPAs also opens up the possibility of banks having to make higher provisions in the March and June quarter. If the economic recovery is delayed, India’s fiscal situation and credit situation could deteriorate," said Deepak Jasani of HDFC Securities.
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7) In the Sensex pack, all shares closed in the red, barring Asian Paints and PowerGrid. M&M was the top loser, shedding around 4%, followed by SBI, Axis Bank, ICICI Bank, IndusInd Bank, ITC and L&T.
8) Broader midcap and smallcap indices fell up to 1.7% amid a broad-based selloff.
9) "Weak global cues combined with the news of a new mutant of the COVID-19 in India spooked participants. respectively. Put together, indications are now pointing towards further slide in the index while volatility is likely to remain high due to the scheduled expiry of March month contracts. We reiterate our bearish yet cautious view and suggest maintaining positions on both sides," said Ajit Mishra, VP - Research, Religare Broking.
10) "The support range of 14750 was disrespected and we dropped over 200 points once that level broke. Keeping a stop loss at 14900, traders can target 14350-14400 as a potential target for the index. Until we do not get past 14900, the short to medium-term trend remains bearish," Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments.
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