Indian stock markets extended their losing streak to sixth straight day, with the BSE Sensex and Nifty falling over 1% today. The Sensex ended 588 points lower at 46,285 while the Nifty skidded 1.3% to 13,634. Both benchmark indices fluctuated between gains and losses in a highly volatile session before succumbing to strong selling pressure in late trade. In six days, Sensex has lost over 3,500 points.
“Nifty closed the week with a sizeable loss, following global nervousness following concerns over valuations and slow speed of vaccination. The impending Budget also pushed some traders to lighten their positions. The high low bar of today engulfs that of the previous session, thus throwing water on hopes of turnaround in the indices. In the choppy trade over the next two sessions, Nifty could take support at 13373-13399 band and later at 13128,” Deepak Jasani, Head of Retail Research, HDFC Securities.
Finance Minister Nirmala Sitharaman today tabled the Economic Survey 2020-21 in the Lok Sabha, ahead of the Union Budget to be presented on Monday.
Dr Reddy’s, Maruti, Bharti Airtel, Bajaj Auto, Infosys, TCS and Bajaj FinServ were the major losers in today’s trade.
“Economic Survey argues for more counter-cyclical measures from the govt. If the government goes along the suggestions from the Survey, more govt spending particularly on infrastructure can be expected. GDP growth rate of 11% for FY22 is realistic. The Survey also bats for accelerated privatization. This is in tune with the Atmanirbhar package announced by the govt in May. If the focus of the Survey gets reflected in the budget, we are likely to get a reformist budget,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Analysts are of the view that the continued pullback in domestic markets was mainly led by profit-booking ahead of the Union Budget and weak global markets.
The broader indices did comparatively well both BSE midcap and smallcap indices restricting their losses to 0.3% and 0.6% respectively.
Foreign portfolio investors (FPIs) offloaded shares worth a net ₹3,712.51 crore on Thursday, according to exchange data. Global stock prices tumbled today amid worries about rising coronavirus cases, Wall Street volatility and delay in US economic aid plans.
US stock markets in recent days have been roiled by a spate of trading by small investors of video game vendor GameStop that hurt hedge funds that bet the stock would fall.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments, said: “The Nifty has closed below 13,700 levels. We could slide further to 13400 and thereafter to 13200. The fall has been backed by very high volumes especially in the last hour of trade. Any rally up can now be utilised to short the Nifty for lower targets. The resistance is now at 14,000 and until that is not crossed, we will remain in the grip of the bears.”
Ajit Mishra, VP – Research, Religare Broking, said: “The Economic Survey failed to trigger the rebound in the markets and now all eyes would be on the Union Budget. We believe that the budget would focus on reviving growth and any disappointment on that front would lead to further correction in the markets. We reiterate our view to prefer hedged bets before the event unfolds and avoid jumping into a trade until the market stabilises.”
Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities: “The market mood has turned fragile as investors have become wary of risks from the upcoming union budget, and also selling by FIIs this week. International markets are also in correction mode due to new lockdowns being enforced in some countries and concerns over new strains of the Covid-19 virus. The 50 DMA of Nifty 50 placed at 13,743 is very crucial for Nifty-50. If it sustains below 13,743 after budget then probability of it going to 13,000 level is very high. We need to wait and see how Nifty-50 closes on Monday post the budget event to get the next directional move.”