NEW DELHI: A non-stop jump in Covid-19 infections spooked Indian investors who sold mercilessly on Monday, dragging bluechip sharply lower. Weak global cues also hurt the investor sentiment on Dalal Street.
Fear gauge India VIX spiked over 13 per cent.
Since the second wave of the pandemic is turning out to be much worse than expected, there is uncertainty about its impact on the economy and markets. The situation may improve if cases peak soon and start coming down. But currently, this is a negative, said an analyst.
“The bad health situation and INR depreciation have improved prospects for the pharma and IT sectors, which are likely to remain resilient even during a market downturn. Economy-facing stocks are likely to be under pressure,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
FACTORS DRAGGING MARKET
Covid rampage: India added 1,52,879 fresh infections reported since yesterday, setting another grim one-day record as the country’s Covid tally reached over 1.33 crore cases on Sunday. 839 deaths in the last 24 hour pushed the total death count to 1.69 lakh.
Yields surge: US Treasury yields climbed on Friday after higher-than-expected March producer price data showed inflation had risen, echoing other reports that said the world’s largest economy was on a steady road to recovery from the pandemic.
Rising inflation: Data out this week are expected to show US inflation jumped in March, while retail sales are seen surging perhaps even with a double-digit gain. Treasury is also set to test demand with offers of $100 billion in debt this week.
How are the blue chip stocks doing?
After opening in the red, benchmark indices dragged further lower. At 9:44 am, BSE flagship Sensex was down 1,198 points or 2.42 per cent at 48,393. NSE benchmark Nifty followed, tumbling 350 points or 2.36 per cent to 14,485.
In the 50-share pack Nifty, Cipla was the biggest gainer, up 2.14 per cent. Infosys, Dr Reddy’s Laboratories and Divi’s Laboratories were among other gainers.
Infosys, HDFC, 7 other stocks that may help you make money in a few weeks
Money-making ideas
A record surge in Covid-19 infections is spooking Dalal Street once again amid a global selloff as investors await the onset of the corporate earnings back home. Anticipating strong stock-specific action, analysts have made a few recommendations that they believe can help investors bag handsome returns in the coming weeks.
Alkem Labs | BUY | Target Price: Rs 3,150
The stock surged past its recent high of Rs 2,799 on the back of above average volumes last week. This augurs well for the upmove to continue. Technical indicators too are giving healthy signals as Alkem Labs trades above its 20-day and 50-day SMA and intermediate momentum indicators like the 14-week RSI are in a rising mode and not overbought. The analyst expects the stock to gradually move higher and, therefore, recommends a buy between Rs 2,800 and Rs 2,860. Stop loss should be kept at Rs 2,700 for target of Rs 3,150.
(Analyst: Subash Gangadharan, Senior Technical & Derivative Analyst, HDFC Securities)
Indraprastha Gas (IGL) | BUY | Target Price: Rs 610
The stock broke out of its recent trading range on the back of above average volumes on Friday. This indicates significant accumulation and augurs well for the upmove to continue. Technical indicators too are giving healthy signals as IGL stock trades above its 20-day and 50-day SMA and daily momentum indicators like the 14-day RSI are in a rising mode and not overbought. The analyst expects the stock to gradually move higher and, therefore, recommends traders to buy IGL in the Rs 530-545 range for a target of Rs 610. He recommends keeping a stop loss at Rs 510.
(Analyst: Subash Gangadharan, Senior Technical & Derivative Analyst, HDFC Securities)
HDFC | BUY | Target Price: Rs 2,690
After a strong uptrend rally, the stock witnessed a short term correction last week. It corrected from its all-time high of Rs 2,896 to Rs 2,413. However, the medium term texture of the stock is still in the positive zone. Post correction, HDFC took support near an important retracement level and is currently near 20-day SMA with modest double bottom formation. The daily and weekly structure suggests that a reversal wave will continue in the near term if it manages to trade above Rs 2,420, which should be the stop loss. The analyst has set a target price of Rs 2,690 on HDFC.
(Analyst: Shrikant Chouhan, EVP – Equity Technical Research at Kotak Securities)
Infosys | BUY | Target Price: Rs 1,540
The stock has maintained consistent uptrend from the last couple of weeks, rallying from Rs 1,350 to 1,450 within the period. That uptrend wave was price dominating and supported with decent volume activity. On the daily and weekly charts, Infosys has formed a robust breakout continuation pattern which suggests that the uptrend momentum is likely to persist in the near future. For swing traders, Rs 1,390 should be the key level to watch out for and stop loss for the trade. The analyst expects a rally towards Rs 1,540.
(Analyst: Shrikant Chouhan, EVP – Equity Technical Research at Kotak Securities)
IndusInd Bank was the top loser in the pack, down 7.29 per cent. SBI, Tata Motors, Bajaj Finance, Adani Ports, UPL, Bajaj Auto, Eicher Motors and Kotak Mahindra Bank were other losers in the pack.
Broader markets
Broader market indices were trading with cuts deeper than their headline peers in morning deals. Nifty Smallcap was down 4.52 per cent while Nifty Midcap declined 4.42 per cent. The broadest index on NSE — the Nifty 500 index — was down 2.97 per cent.
Dr Lal Pathlabs, Mindtree, Ipca Labs and Thyrocare Technologies were gainers from the space while Sterlite Tech, India Cements, Sterling wilson Solar, RBL Bank, M&M Financials Services and Bank of Baroda were under selling pressure.
Global markets
MSCI’s broadest index of Asia-Pacific shares outside Japan was off 0.6 per cent in slow trade. Tokyo’s Nikkei edged down 0.5 per cent, while South Korean stocks were near flat.
Chinese blue chips eased 0.9 per cent ahead of a rush of economic figures from the country.
Nasdaq futures slipped 0. per cent on Monday, as did S&P 500 futures. EUROSTOXX 50 futures dithered either side of flat, while FTSE futures were down 0.2 per cent.
