The markets will continue with the downward trend today and possibly this week with the rising number of COVID cases in Maharashtra and also the possiblility of a second lockdown, according to stock market experts.
The 30-share BSE benchmark Sensex was trading 1,189.83 points lower at 47,642.20, and the broader NSE Nifty was down 340.60 points at 14,277.25.Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 437.51 crore on Friday, according to exchange data.
Ajay Kejriwal, Head--Broking and Distribution vertical, Choice Group, said though the Centre has given no indication of a lockdown, there state government will have to announce one with the rising number of COVID cases. Selloff was witnessed in across sectors during the initial trade led by banking and financial stocks.
Sandeep Porwal, Technical & Derivative Analyst at Ashika Group, said after yet another jolt from the intermediate highs, benchmark indices staged a big Gap Down opening. The major trigger for such sharp reversal is the growing numbers of Covid cases. As global markets remain more resilient with underlying bias remain bullish for most of the global indices.
Back home, a majority of sectors are in dip cuts--banking and financials remain in a sustained bearish trend. Given the higher weightage of financials, we are seeing failed breakouts from Nifty too, Porwal said. The market breadth indicates a strong bear grip since the morning.
"The Nifty in the recent past despite major intraday sell-off managed to hold on the levels of 14300-14250 on a closing basis. The continuation of the sideways trend was being observed since the mid of February 2021. Overall. I expect further underperformance below the days low if the index failed to hold on. Among all the sectors expect financials to stage further underperformance. While IT and Pharma shall be favored buy bulls on any dips as it comes," Porwal said.
The Bombay Stock Exchange nosedived to over 1,400 points on first day of week’s opening on Monday. It touched an intraday low of 47,362.71 so far. It opened at 47,940.81 at the intraday high of 47,940.81 points. Around 10.10 a.m., Sensex was trading at 47,561.41, lower by 1,270.62 points or 2.60 per cent from its previous close of 48,832.03. The Nifty50 on the National Stock Exchange was trading at 14,275.85, lower by 342.00 points or 2.34 per cent from its previous close.
All Sensex components were in the red. Bajaj Auto was the top loser in the Sensex pack, dropping over 5 per cent, followed by IndusInd Bank, SBI, ICICI Bank, Bajaj Finance and Axis Bank. In the previous session, Sensex ended 28.35 points or 0.06 percent higher at 48,832.03, and Nifty rose 36.40 points or 0.25 percent to 14,617.85.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 437.51 crore on Friday, according to provisional exchange data."
The health crisis India is going through and localised lockdowns and restrictions on economic activity warrant a market correction," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. The targets of around 11 per cent GDP growth and above 30 percent earnings growth for FY 22, that the market had assumed pre-second wave are likely to fall short, he added.
Active COVID-19 cases in India stood at 19,29,329, up from 18,01,316 cases registered on Sunday, according to Union Health Ministry data."But, this negativity need not reflect fully in the market since the global clues are positive. The sharp recovery in global growth led by the US and China augur well for markets globally."
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo were trading on a positive note in mid-session deals.
Meanwhile, international oil benchmark Brent crude was trading 0.49 percent lower at $66.44 per barrel.
Rupee slumps 52 paise against dollar
The rupee fell 52 paise to 74.87 against the US dollar in early trade amid fears that a rapid resurgence of COVID-19 cases in the country could disrupt economic recovery. Besides, heavy selloff in domestic equities also weighed on investor sentiment.
At the interbank forex market, the domestic unit opened at 74.80 against the US dollar, then fell further to 74.87, registering a fall of 52 paise over its previous close.
On Friday, the rupee had settled at 74.35 against the American currency. The Indian rupee started on a weaker note against the US dollar after another surge in coronavirus infections over the weekend increased the risk of more broadbased lockdowns, Reliance Securities said in a research note.
The country’s total tally of COVID-19 cases crossed 1.50 crore with a record single-day rise of 2,73,810 new coronavirus infections, while the active cases surpassed the 19-lakh mark, according to the Union Health Ministry data updated on Monday. Registering a steady increase for the 40th day in a row, the active cases have increased to 19,29,329 comprising 12.81 per cent of the total infections, while the national COVID-19 recovery rate has dropped to 86 per cent.
Asian currencies weak
Asian currencies were mostly weaker this Monday and could weigh on sentiments, the Reliance Securities' note said adding that "the RBI could be present to curb volatility".Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.10 percent to 91.64.Brent crude futures, the global oil benchmark, fell 0.37 per cent to $66.52 per barrel.