Bears again gripped Indian markets after two sessions of bullish show
Financials were among the worst hit today in Indian markets
Indian stock markets fell sharply today, dragged down by financial stocks after after a prominent fund house said it would wind up some funds. The Sensex closed down over 500 points at 31,327, closing the week about 1% lower while Nifty ended 1.71% lower at 9,154. Global markets were also mostly lower today as investors also worried over reports that an experimental drug to treat COVID 19 showed inconclusive results.
Financials were among the worst hit today in Indian markets, with Axis Bank Ltd, ICICI Bank Ltd and IndusInd Bank Ltd sliding 4.5%-5.6%. Shares in HDFC Asset Management Co slid over 6%. Bajaj Finance slumped over 9%.
Franklin Templeton Mutual Fund, one of India's most prominent mutual fund houses within the fixed income space, said late on Thursday it would wind up six credit funds with a large exposure to higher-yielding, lower-rated credit securities, citing severe market dislocation and illiquidity caused by the coronavirus.
Here is what market analysts said about today's market action:
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
“The market witnessed selling pressure near 9350 which is a resistance level. The week was volatile with a momentum of near about 480 points. The gap down at the opening was largely due to weak global markets. We are of the view that the market will remain volatile throughout the next week. Technically, profit booking was seen in Nifty between 9300-9350 levels, and we can expect further price correction below 9150. For the next few trading sessions, 9150 should act as a trend decider level, below which we can expect one more correction wave up to 9050-9000 level. However, trading above 9150 could possibly open another uptrend rally up to 9275."
"Bears again gripped the market after two sessions of bullish show as optimism was downgraded by two crucial domestic events include first low response to RBI TLTRO 2.0 and second close down of 6 debt mutual funds scheme by Franklin Templeton amidst liquidity issue. As against ₹25,000 crore offered, the RBI got bid for ₹12,850 crore which indicates that Indian banks are still reluctant to lend to small and micro NBFCs.
"Nifty ends below 9,200 levels, on the sectorial front, except energy and pharma all other indices ended in red. For coming session Nifty has good support zone at 9000 where the Put side OI is highest if managed to hold 9000 levels we can see 9400 levels crossing above it can show 9600 levels. Nifty Bank closed a week at 19587 with big loss of 3.36 percent having a good support at 19000 levels sustains above it can show 20000 levels crossing above it can show upside 21500 levels."
Ajit Mishra, VP - Research, Religare Broking Ltd
"The bears took grip over the Indian markets after two days of rebound. The benchmark indices opened gap down and traded with negative bias after Franklin Templeton - US-based fund house decided to shut its six India funds over liquidity crisis. However, in the afternoon, markets recouped some of its losses, driven by positive momentum in select index stocks like Reliance, LT, Britannia and Sun Pharma. But, the recovery was short-lived and selling pressure in the later half again and pushed the benchmark to the day’s low.
"The continuous underperformance from the banking pack will remain the overhang on the benchmark ahead also. Consistent buying interest mainly in pharma and select FMCG majors is indeed providing some solace to the participants but it’s not sufficient enough to trigger a sustainable up move in the benchmark. Nifty may see fresh slide below 9000 so traders should plan their positions accordingly."
Vinod Nair, Head of Research at Geojit Financial Services.
"Indian indices fell by over 1.5%, in sync with global markets and tracking increasingly weak economic data from countries around the world and especially in the US. There was also uncertainty regarding the effectiveness of a vaccine that was in development, which contributed to the overall negativity. Markets are expected to remain volatile considering the rising number of cases in India and no positive signals from the ongoing earnings guidance."
"Nifty continued to consolidate within the prior week’s range while facing strong resistance at 9350 zone for most part of the week. The recent rally from the lows of 7500 has unfolded in the form of a rising wedge pattern, clearly evident on the daily time frame which is a bearish indication. A break below 9100 will confirm the rising wedge break down and the index may retest levels of 8800 on the downside. Traders can initiate shorts on break below 9100 in Nifty50."
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