Bank stocks suffer huge losses after Moody's Investors Service changed the outlook for the banking system from stable to negative.
Another spike in global coronavirus infections that crossed one-million mark and relentless selling by institutional investors weighed on sentiment on April 3, as the Sensex plunged more than 600 points and the Nifty just about holding the crucial 8,000 level.
Let’s look at the final tally on D-Street: the Sensex tanked 674 points to 27,590, while the Nifty closed at 8,083, down 170 points. Indian markets will remain shut on Monday on account of a public holiday.
Financials led the fall on D-Street as selling pressure on some of the top quality names continued. Financials hold 30-40 percent weightage in the index and any fall in top names leads to sharp selloff.
Most bank stocks suffered huge losses in intraday trade on BSE on April 3 after Moody's Investors Service changed the outlook for the banking system to negative from stable, underscoring the impact f the disruptions caused by the viral outbreak.
Sectorally, selling pressure was seen in the Bankex followed by finance, consumer durables, auto and consumer discretionary.
The broader markets were better off, as the S&P BSE Midcap index fell 1.1 percent while the S&P BSE Smallcap index was down just 1.03 percent.
"The Indian markets opened and stayed negative, with reduced volatility. A ratings downgrade for the banking sector due to the impact of Covid-19 and ensuing stressed asset concerns, impacted the financial stocks,” Vinod Nair, Head of Research at Geojit Financial Services, said.
“FIIs were net sellers to the tune of Rs 1,100 crore on April 1 and show no signs of reversal. Markets are trading in uncertainty regarding the spread of the virus in India, as hope emerged of infections peaking in some of the worst affected global markets,” he said.
Top Nifty gainers include GAIL India, ITC, Cipla, and Sun Pharma.
Top Nifty losers include Titan Company, IndusInd Bank, ICICI Bank, and Axis Bank.
Stocks & sectors
Sectorally, the S&P BSE Bankex was down 5.3 percent, followed by the S&P BSE Finance index that fell 4.3 percent and the S&P BSE Auto index that was down 2.9 percent.
Action was seen in the S&P BSE Healthcare index, which was up 3.5 percent followed by the S&P BSE Oil & Gas index that rose 2.03 percent and the FMCG index was up 0.84 percent.
Volume spike of more than 100% was seen in stocks like ITC, Cipla, Apollo Hospitals, Lupin and Torrent Pharma.
Long buildup was seen in stocks like Torrent Pharma, IGL, HPCL and MRF.
Short buildup was seen in stocks like JSPL, Cummins India, RBL Bank, Shriram Transport, and PVR.
More than 200 stocks hit a fresh 52-week low. These include Shree Cements, Eicher Motors, Maruti Suzuki, ICRA, PVR, and Supreme Industries.
Stocks in news
Banking stocks led the fall, with the NiftyBank falling nearly 1,000 points, weighed down by losses in RBL Bank, Axis Bank, IndusInd Bank, ICICI Bank and Bandhan Bank.
ITC: Shares jumped nearly 7 percent in intraday trade on BSE after reports said the company was looking to acquire spice maker Sunrise Food.
RBL Bank: Shares of the private sector lender plunged more than 15 percent intraday after the management forecast rise in provisions from credit card business in the first quarter of FY21.
Cipla: The stock gained over 8 percent after the pharma company announced the successful completion of Phase-3 clinical study for a generic version of GSK's Advair Diskus.
Lupin: The share price rose 14 percent after the company received an establishment inspection report (EIR) from the USFDA for its Aurangabad, India facility.
The Nifty formed a bearish candle on the daily charts.
Technically speaking, the Nifty needs to sustain above 7,800 levels in the current leg of downswing to retain a positive bias, which will subsequently give a lifeline to the bulls.
In case the Nifty closes below 7,610, then weakness will be confirmed, which will open up more downsides below 7,511 with initial targets of 7,341, Mazhar Mohammad, Chief Strategist – Technical Research &Trading Advisory, Chartviewindia.in, said.
On the rebound from 7800 initially, downside target shall be towards 8,600.
For the time, traders are advised to remain neutral and wait for stability, said Mohammad.
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