Despite the massive crash, analysts are not discounting the bulls. They believe this is a buy-on-dip market, and short-term correction will trigger new buying, as economic fundamentals have improved, with more focus on industrials and cyclicals.
The 30-share pack Sensex plunged 1,145.44 points or 2.25 per cent to close at 49,744.32. The index slipped below the 50,000 mark after nearly three weeks. Its broader peer NSE Nifty cracked 306.05 points or 2.04 per cent to 14,675.70.
“Rising economic restrictions from spike in virus cases and weak global cues hit the domestic market sentiment. The rate of market fall was aggravated by a sharp rise in volatility, being a monthly F&O expiry week. FPI inflows which was leading the rally slowed down due to global vulnerabilities from rising bond yield & inflation,” said Vinod Nair, Head of Research at Geojit Financial Services.
Overall, investors lost Rs 3.80 lakh crore at the end of the day as the market capitalisation of BSE-listed companies came down to Rs 200.18 lakh crore.
Market at a glance
- India VIX, the measure of volatility, surges 14% to 25.47
- Metals shine amidst a sea of red; Nifty Metal sole sectoral gainer
- RIL, HDFC, TCS biggest drags on Sensex; HDFC Bank provides support
- Torrent Power climbs 4% after grabbing Dadra & Nagar Haveli discom
- Eicher Motors emerges top bluechip loser; down over 5%
Among the bluechip names, Adani Ports was the top gainer, rising 2.79 per cent. JSW Steel, Hindalco, Tata Steel, Grasim Industries, ONGC, Britannia and Hero MotoCorp were other gainers.
Eicher Motors was the top loser in the Nifty pack, falling 5.09 per cent. M&M, Tech Mahindra, Dr Reddy’s Labs, Axis Bank, IndusInd Bank, Reliance Industries and SBI Life Insurance were others that ended in the red.
Broader market indices also ended with cuts but performed better than their headline peers. Nifty Smallcap fell 1.19 per cent and Nifty Midcap dropped 1.28 per cent. Nifty 500 — the broadest index on NSE — declined 1.82 per cent.
Aditya Birla Capital, Varun Beverages, Jubilant Foodworks, Cyinet, Dilip Buildcon and Firstsource Solution were top gainers from mid and smallcap indices, climbing in the range of 5-8 per cent.
Bajaj Electric, PVR, IOL Chemicals and Pharmaceuticals, Future Retail, Godrej Properties and REC were major losers from broader market space, falling in the range of 5-8 per cent.
Barring Nifty Metal that rose 1.6 per cent, all sectoral indices on NSE ended with cuts. Nifty Media was the top loser, down 3.42 per cent. Nifty IT, Realty and Nifty PSU Bank were others that fell more than 2.5 per cent each.
“We reiterate our cautious stance and suggest focusing more on position management during the corrective phase. Further, volatility is likely to remain high across the board. Traders should align their positions accordingly and limit leveraged positions.”
Market breadth was in favour of losers as 1,040 stocks ended in the green, while 1,987 names settled with cuts. As many as 223 securities hit 52-week highs, mostly from the smallcap space. Meanwhile, 44 names hit 52-week lows, mostly from the microcap space. About 300 stocks hit upper circuit limits and 300 lower circuit limits.
European markets were also trading with cuts at the last count. London-based FTSE was down 0.68 per cent while Paris and Frankfurt fell 0.55 per cent and 0.54 per cent, respectively. In Asia, Indonesia, Japan, Taiwan and Singapore ended in green while others registered losses.