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Last Updated : Jul 20, 2019 11:08 AM IST | Source: Moneycontrol.com

Sensex breaks below 39K; more than 100 stocks in Smallcap index fell 10-40%

The S&P BSE Sensex fell 1.03 percent while the Nifty50 closed 1.15 percent compared to 3.3 percent plunge seen in the S&P BSE Smallcap index and 3.2 percent decline in the S&P BSE Midcap index.

Kshitij Anand @kshanand

The S&P BSE Sensex breached 39,000 on the downside while Nifty50 closed below 11,500 to hit a two-month low. But, the carnage was seen mostly in the broader markets which fell over 3 percent for the week ended July 19.

The S&P BSE Sensex fell 1.03 percent while the Nifty50 closed 1.15 percent compared to 3.3 percent plunge seen in the S&P BSE Smallcap index and 3.2 percent decline in the S&P BSE Midcap index.

As many as 119 stocks in the S&P BSE Smallcap index fell 10-40 percent which include names like Dhanlaxmi Bank, NCC, Jet Airways, MindTree, Opto Circuits, Time Technoplast, Allahabad Bank, Manpasand Beverages, Cox & Kings, Orchid Pharma, and Talwalkar Better Value, etc. among others.

Close

The large part of the decline was on account of muted corporate results, no immediate resolution with respect to trade talks between the US and China, slow down seen in domestic economic growth, and the finance minister’s comments which dashed hopes of foreign investors of any reversal in levy of surcharge of FPIs.

“Indian capital markets are in capitulation mode, as there has been a clear dearth of good news. The continuous corporate defaults, high-tax regime, weak earnings season and fragile economy are not helping the already-delicate sentiment,” Jagannadham Thunuguntla, Sr. VP and Head of Research (Wealth) – Centrum Broking Limited, told Moneycontrol.

“With the crisis deepening and widening, markets are eagerly looking forward if policymakers can talk-up the markets with market-friendly tone. Going forward, Fed’s policy holds key to revive the market sentiment if they can provide delight with 50 bps rate cut,” he said.

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In the S&P BSE 500 index, as many as 38 stocks fell 10-20 percent which include names like YES Bank, Reliance Capital, Reliance Power, Manpasand Beverages, DCB Bank, RBL Bank, DHFL, and Religare Enterprises, etc. among others.

In the Nifty50 index, as many as 38 stocks gave negative returns for the week ended July 19, and as many as seven stocks fell 5-11 percent which include names like IndusInd Bank, Bajaj Auto, Gail India, Eicher Motors, Hero MotoCorp, M&M, and YES Bank.

Outlook for the coming week:

On July 22, D-Street will react to RIL and HDFC Bank results. Apart from that, more than 200 stocks on the BSE will declare their results for the quarter ended June in the coming week.

The Nifty50 broke below crucial support levels in the week gone by, which is not a positive sign for the bulls. It was the second consecutive week of declines.

The Nifty50 faced pressure around 13-days exponential moving average and closed below 100-days EMA. It broke below intra-month swing low of 11,461, and the next crucial support is seen at 200-days EMA placed at 11,293 on daily charts.

Benchmark indices extended decline for the second successive week amid disappointing earnings of some companies. Nifty midcap and Nifty Smallcap indices underperformed with a cut over 2 percent for the week.

“The weekly price action for Nifty resulted in a sizeable bear candle with lower high and lower low, signalling continuation of negative bias, in line with our expectations. Breach of key rising trend line (placed at 11,530) and lack of faster retracement of preceding declining legs makes us believe that Nifty is heading towards 11300 levels, while stock-specific action would continue as we sail through Q1FY20 earnings and derivatives expiry of July 2019 series,” Dharmesh Shah, Head – Technical, ICICI direct, told Moneycontrol.

“Another key observation is that, for the first time since October 2018, the index has retraced its preceding major rally by more than 61.8%, indicating extended consolidation going ahead. This development coupled with the shallow nature of pullbacks led us to believe that 11600-11650 will act as key hurdle going forward as it is the low of Exit poll session and recent breakdown area,” he said.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Jul 20, 2019 11:08 am
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