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Taking Stock: Manic Monday! Investors lose Rs 3 lk cr amid rising Middle-East tensions

Moneycontrol logo Moneycontrol 06-01-2020 Nishant Kumar

The S&P BSE Sensex plunged nearly 800 points to register its biggest single-day fall in a year while Nifty50 breached 12,000 to post its biggest one-day fall in six months.

a group of people that are talking to each other: Taking Stock: Manic Monday! Investors lose Rs 3 lk cr amid rising Middle-East tensions © Rakesh Patil Taking Stock: Manic Monday! Investors lose Rs 3 lk cr amid rising Middle-East tensions

Volatility index surged over 16 percent, the biggest single-day gain in a year. Rising Middle-East tensions wiped out almost Rs 3 lakh crore in terms of market wealth, pushed crude oil prices towards $70/bbl, and rupee to its lowest level since November 14.

The market capitalisation of BSE-listed companies stood at Rs 153.86 lakh crore, down nearly Rs 3 lakh crore from Friday’s close of Rs 156.87 lakh crore, data showed.

Equity markets across the globe moved lower after the US President Donald Trump threatened to retaliate against Iran. The country vowed to avenge the killing of its top commander.

Tensions in the Middle-East after the killing of a top Iranian general by the United States erased new year gains for a gauge of world shares on Monday as investors pushed safe-haven gold to a seven-year high, and oil jumped to its highest since September, said a Reuters report.

Back home, rupee hit its lowest level since Nov. 14 and was last weaker to 72.06 against the dollar as oil prices surged more than 2 percent. Let’s look at the final tally on January 6 on D-Street – the S&P BSE Sensex plunged 787 points to 40,676 while the Nifty50 dropped 233 points to 11,993.

Sectorally, profit-taking was seen in metals, the public sector, realty, banks, energy and oil & Gas. Broader markets underperformed as the S&P BSE Midcap index was down 2.3 percent while the S&P BSE Smallcap index fell 1.96 percent. Experts feel that consolidation in the market is likely to extend further given both Sensex and Nifty closed below crucial support levels.

The S&P BSE Sensex broke below 41000 while the Nifty50 closed below 12,000 support. US-Iran-Middle East tensions spooked Indian markets badly throughout the day as financials & metals led the fall which was pretty broad-based. Risk-Off was evident as Gold jumped to a 7 year high. Rising Oil prices also took a toll on our markets,” S Ranganathan, Head of Research at LKP Securities told Moneycontrol.

Top Nifty gainers: Power Grid, Wipro, Titan Company

Top Nifty Losers: SBI, Zee Ent, Vedanta, Bajaj Finance fell over 4% each

Stocks and Sectors:

Sectorally, the S&P BSE Metal index plunged 2.9 percent, followed by the S&P BSE Public Sector which fell 2.6 percent, and the S&P BSE Realty index was down 2.5 percent. The S&P Bankex fell 2.4 percent while the Nifty Bank was down by 832 points to 31,237. Nifty Bank posted its biggest fall in six-months. Volume Spike of 100-200% was seen in Motherson Sumi, Shriram Transport, Balkrishna Industries, Pidilite Industries, and Bharat Forge.

Long Buildup – MindTree, Wipro, NIIT Technologies

Short Buildup – HPCL, Canara Bank, Bank of Baroda

Stocks in the news: Titan Company shares gained 1.65 percent after the company reported Q3 jewellery revenue growth at 11 percent.

The retail growth was much better at 15 percent and fragrances business witnessed growth in excess of 20 percent. Shares of Jet Airways were locked in 5 percent upper circuit after a media report said that South American Synergy Group had again shown interest in acquiring the debt-laden airliner.

Tata Motors shares dropped nearly 3 percent after Jaguar Land Rover reported de-growth in its US sales for December month. Shares of Force Motors rallied 7.5 percent after a sharp 48.3 percent rise in December sales compared to same month last year. Private sector lender Karur Vysya Bank fell 5 percent after PR Seshadri resigned as Managing Director & CEO. 

Technical View: The Nifty50 formed a Long Black Day kind of candle on the daily charts and Supertrend indicators triggered a SELL signal on Nifty The last time it triggered a Sell was back in July, and Nifty made a low of 10,637 before bouncing back.

In this corrective move the ideal target for Nifty shall be in the zone of 11860 – 11832 levels where this pattern shall get culminated. Nifty50 closed below 50-DMA placed at 12014 but took support near 50-Days EMA placed near 11,977 Hence, Monday’s low of 11,974 will be an important level to track on Tuesday.

A break below this level could take the index towards 11,860-11832 levels, suggest experts. Meanwhile, upsides shall remain capped in the zone of 12179 – 191 levels. Therefore for time being traders are advised to remain neutral whereas intraday traders can consider shorting if Nifty trades below 11974 levels, they say.

Three levels: 11974, 12179, 12293


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