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Indian stock markets fell sharply today, dragged down by financial stocks after a major fund house said it would close some funds. The Sensex closed with more than 500 points at 31,327, closing the week approximately 1% lower, while Nifty finished 1.71% lower with 9,154. Global markets were also mainly lower today, as investors were also concerned by reports that an experimental drug to treat COVID 19 showed inconclusive results.
Finance was among the worst hit today in the Indian markets, with Axis Bank Ltd, ICICI Bank Ltd and IndusInd Bank Ltd declining from 4.5% to 5.6%. HDFC Asset Management Co shares fell more than 6%. Bajaj Finance fell more than 9%.
The Franklin Templeton Mutual Fund, one of India’s most prominent mutual fund houses within the fixed income space, said Thursday night that it would close six credit funds with great exposure to higher-yielding, lower-rated credit securities. , citing a severe market dislocation and illiquidity caused by the coronavirus.
Here is what market analysts said about current market action:
Shrikant Chouhan, Executive Vice President, Technical Equity Research at Kotak Securities
“The market witnessed a selling pressure close to 9350, which is a resistance level. The week was volatile with momentum close to 480 points. The gap in openness was mainly due to weak global markets. We are of the opinion that the market will continue to be volatile for the next week. Technically, the profit reserve was observed at Nifty between the 9300-9350 levels, and we can expect a further price correction below 9150. For the next trading sessions, 9150 should act as a decisive level of trend, below the which we can expect one more correction wave at 9050-9000 level. However, trading above 9150 could open another uptrend rebound to 9275. “
Sumeet Bagadia, Executive Director, Choice Broking
Bears again took over the market after two bullish show sessions as optimism was downgraded by two crucial domestic events including the first low response to RBI TLTRO 2.0 and the second shutdown of 6 Franklin mutual debt fund schemes. Templeton in the midst of a liquidity problem. ₹Rs 25 billion offered, the RBI received an offer for ₹Rs 12.85 billion, indicating that Indian banks are still reluctant to lend to small and micro NBFCs.
“Nifty ends below the 9,200 levels, on the sector front, except energy and pharmacy, all other indices ended in red. For the next session, Nifty has a good support zone at 9000 where the Put side OI is Higher if 9000 levels can be maintained, we can see 9400 levels crossing above can show 9600 levels. on top, it can show that 20,000 levels crossing above can show 21,500 levels higher. “
Ajit Mishra, VP – Research, Religare Broking Ltd
“The bears seized the Indian markets after two days of recovery. Benchmarks opened the gap and traded with a negative bias after Franklin Templeton, the US-based fund house, decided to close its six However, in the afternoon, markets recovered some of their losses, driven by positive momentum in stocks from select indices such as Reliance, LT, Britannia and Sun Pharma. short-lived and selling pressure in the second half again and pushed the benchmark to the low day.
“The continued underperformance of the banking package will continue to be the looming benchmark balance as well. Constant buying interest primarily in FMCG pharmaceuticals and specializations is providing some comfort to participants, but not enough to spark a movement Sustainable upward benchmark “Nifty may see a further drop below 9000, so traders should plan their positions accordingly.”
Vinod Nair, head of research at Geojit Financial Services.
“Indian indices fell by more than 1.5%, in sync with global markets and the tracking of increasingly weak economic data from countries around the world and especially the United States. There was also uncertainty regarding effectiveness of a vaccine that was in development, which contributed to overall negativity. Markets are expected to remain volatile considering the increasing number of cases in India and without positive signs from the ongoing earnings guidance. “
Jimeet Modi, Founder and CEO, SAMCO Securities & StockNote.
“Nifty continued to consolidate within the range of the previous week as it faced strong resistance in the 9350 zone for most of the week. The recent rally from the 7,500 lows has developed in the form of an ascending wedge pattern, clearly evident in the daily time frame, which is a bearish indication. A break below 9100 will confirm the upward wedge break and the index may retest 8800 levels lower. Traders may start short on the break by below 9100 at Nifty50 “.
