Over the past four weeks, investors have booked profits on the last session of the week in order to not be caught off guard by any announcements regarding Covid-19 restrictions over the weekend. Further, the rising shortage of vaccines across states is leading to worries that India’s herd immunity may be delayed.
For the day, the Nifty50 index ended 1.8 per cent or 275 points lower at 14,631.1, while the BSE Sensex closed at 48,782.36, down 2 per cent or 990 points.
In the broader market, the selling was milder as the Nifty Midcap 100 and Nifty Smallcap 100 index ended 0.4 per cent lower each.
Here are the major movers in today’s session:
AU Small Fin slumps on NPA concerns
Shares of the small finance bank nosedived 11 per cent after the company asset quality deteriorated in the quarter ended March likely because of the end of the Supreme Court’s standstill on recognition of bad loans till August 31. The bank reported gross non-performing assets ratio of 4.2 per cent as against 3.7 per cent in the previous quarter.
Refiners shine on hopes of price hikes
Shares of state-owned refiners rose 1-2 per cent after brokerage firm Credit Suisse Securities India said that these companies could now move ahead with pending price hikes, which were on hold due to the assembly elections in four key states of Tamil Nadu, Kerala, West Bengal and Assam.
Pharma stocks hold fort
Shares of drugmakers again were an island of green in a sea of red as investors flocked to these stocks to hedge their portfolio from any untoward rise in volatility in the coming weeks. Investors believe the sector’s earnings to be immune to the ongoing surge in Covid-19 infections in the country and renewed restrictions.
HDFC plummets as NBFCs ditched
Shares of
Corp sank nearly 5 per cent as investors were wary of non-bank finance companies, amid rising concerns that they will be the hardest hit by the second wave and the new bad loans that will originate due to the latest lockdowns across the country. The demand from the sector for restructuring of loans of small businesses suggests that there is new pain in the system.
Banks falls on asset quality worries
The concerns that afflicted NBFCs like HDFC also weighed heavily on banks as the surging Covid-19 cases are leading to concerns that the government may not have any other option left but to impose some restrictions. Investors are worried that a prolonged second wave amid a shortage of vaccines could delay the revival of the economy and therefore, credit growth. The Nifty Bank index fell nearly 3 per cent.
What gave the buy signal?
Despite the weakness in the overall market, as many as 39 stocks listed on the National Stock Exchange gave a buy signal based on the MACD indicators, including GAIL India, Piramal Enterprises, BASF India, and MRF.
What’s ahead for the market?
Traders aggressively sold the out-of-money call options of the Nifty50 index, suggesting that they do not expect an immediate bounceback in the market on Monday. In the futures segment, traders added short positions in the May contract of the index as open interest rose 14 per cent.
“We suggest limiting naked leveraged positions and preferring defensive on dips,” said Ajit Mishra, vice president of research at Religare Broking.
