NEW DELHI: The Reserve Bank of India’s bleak near-term outlook for the economy and decision to extend the moratorium on bank loan repayment by further three months did not go well with investors on Dalal Street, as they anticipated bigger bad loan pain and dumped bank and financial stocks.
This dragged the benchmark indices lower. The 30-share Sensex shed 0.84 per cent, or 260 points, to close at 30,673, while the 50-share Nifty dropped 0.74 per cent, or 67 points, to 9,039.
An escalation in tensions between the US and China over a legislation about Hong Kong that seeks to take away some rights of the citizens also dampened the mood back home.
However, IT, pharma and media stocks were in demand. SpiceJet continued its upward journey as domestic aviation firms readied to resume service from Monday, May 25.
Hereunder, we tried to capture some of the key trends from Friday’s session:
Bank stocks take big hit
RBI’s decision to increase the moratorium period on loan repayment worried investors, who now fear a major spike in bad loans once that EMI freeze gets over. NIfty Bank plunged 2.57 per cent, dragged by 3-6 per cent drop in Axis Bank, Federal Bank, RBL Bank, ICICI Bank and Bandhan Bank. Nifty Financial Services tanked over 3 per cent.
Auto socks record 2nd week of gains
Nifty Auto index rose for the second straight week, as buyers lapped up vehicle manufacturers in hopes that there will be swift sales revival. The rate cut by RBI also helped its cause. The index gained 0.30 per cent led by a 4.43 per cent jump in M&M and 1-3 per cent gains in Hero Moto, Maruti Suzuki and Bosch.
India VIX drops for 2nd week
India VIX, the gauge of volatility in the market, declined for the second consecutive day as the market veered toward stability. On Friday, the fear barometer dropped further 2.37 per cent to 32.20.
Insider trading: Cipla, Biocon
Two designated persons of Cipla sold over 22,000 shares of the company while in similar transactions 33,000 shares were sold in Biocon. The share price of Cipla rose 3.66 per cent while that of Biocon dropped 1.52 per cent following the transactions. Meanwhile, three employees of Kotak Bank acquired nearly 7,000 shares via ESOS and another employee sold 3,800 shares. The stock closed 0.91 per cent higher at Rs 1,160.
100 names @52-week-lows
Nearly 100 stocks hit their yearly-lows on Friday. They include Bajaj Finserv, that came out with its earnings on Thursday, Bajaj Finance, Brigade Enterprises, Chalet Hotels, DB Corp, DCB Bank, IIFL Securities, Cyient, SBI and PFC, among others.
Stocks that gave ‘buy’ signals
As many as 62 stocks on BSE gave ‘buy’ signal as they crossed above the signal line on MACD indicator. They included Bharat Electronics, Cadila Healthcare, Infosys, Balrampur Chini, Pidilite Industries, Uflex and Trent, among others.
Stocks that gave ‘sell’ signals
An equal number of stocks gave sell signals as they crossed below the signal line. They included names like Cholamandalam Investment, V-Guard, GMR Infra, Indian Bank, TVS Motor, Bajaj Auto, Rites, Avanti Feeds and Inox Wind, among others.
Where is Nifty headed?
A sensitive Bank Nifty closed lower. It was under immense selling pressure as the spreads between lending and borrowing are narrowing. On the other side, rate sensitive sectors and immediate beneficiaries of a cut in interest rates, especially cement and auto stocks did extremely well, said an analyst. “Technically, most of the time if we compare then the cement sector starts gaining momentum in the pre-monsoon period. Nifty has formed one lower high at 9,178 and closed below the level of 9,050. Traders need to be cautious below the level of 8,950,” said Shrikant Chouhan of Kotak Securities.