Stock Market Today:
Spiralling coronavirus cases in China and the Bank of Japan’s decision to keep interest rates elevated for a longer period added to the volatility in the Indian market which got caught in the negative sentiment after opening on a strong note.
At close, the 30-pack BSE Sensex was down 635 points, or 1.03 percent, at 61,067, while the Nifty lost 186 points or 1.01 percent, to end the volatile day at 18,199.
Tracking positive global cues, Indian shares opened higher but as reports of worsening COVID situation in China started coming in, the sentiments soon turned negative.
The government and its think tank Niti Aayog sounded alert about the emerging COVID situation and its implications, further dampening the mood.
“The benchmark indices dropped yet again on the back of the Covid scare in China and elsewhere, but today’s fall was more noticeable to participants since the red colour on the screen engulfed all over barring pathology labs, hospitals and select pharma counters involved in Covid-related drugs,” said S Ranganathan, Head of Research at LKP Securities.
Barring healthcare and IT, all sectoral indices ended in the red even as developed markets continued to trade in the green in early sessions.
The Nifty Pharma was up 2.4 percent, while Nifty IT edged higher by half a percent. Metals and financials were the top losers, down more than 2 percent each. Realty and autos ended 1.6 and 1.4 percent lower.
Adani Enterprises, Adani Ports, IndusInd Bank, Bajaj Finserv and UltraTech Cement were the top losers on the Nifty, sliding between 2.1 and 6.3 percent.
Among the gainers, Divis Labs rose the most by 5 percent, while Apollo Hospital, Cipla, Sun Pharma and HCL Tech were the other top gainers on the Nifty, rising between one to 3.7 percent.
Stocks and sectors
On the BSE, too, there were only two gainers, the BSE Healthcare gained the most by 2.25 percent, while the IT index rose 0.23 percent. The BSE infrastructure was the top loser, down 2.8 percent, the BSE utilities lost 2.5 percent and the BSE power 2.4 percent.
Telecom, PSU, industrials and CPSE indices were down more than 2 percent each.
The India VIX, which indicates the degree of volatility traders expect over the next 30 days, surged by 12.9 percent from 13.8 to 15.6.
The broader indices, too, were caught in the downward spiral and ended the day in the red. The BSE midcap index was down 1.4 percent and the BSE smallcap 2.2 percent.
A long build-up was seen at the counters of Glenmark Pharmaceuticals, Dr Lal Pathlabs and Divis Laboratories, while a short build-up was witnessed in City Union Bank, Adani Enterprises and Indian Hotels.
Among specific stocks, a volume spike of close to 6,000 percent was seen in BHEL, while the volumes in Delta Corp and Balrampur Chini surged more than 800 and 700 percent.
Outlook for December 22
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd
Indian markets underperformed their Asian peers and came down crumbling on a broad-based sell-off, mainly over concerns that recessionary fears in key major economies will have a spill-over effect on local growth.
Technically, the Nifty again found support near 18,450 and corrected sharply and formed a long bearish candle on daily charts, which is broadly negative.
As long as the index trades below 18,350, the weak formation will likely continue and below it, the Nifty can slip to 18,100-18,050. A fresh pullback rally is possible only if the index goes past 18,350 after which it can move to 18450-18475.
Santosh Meena, Head of Research, Swastika Investmart Ltd
Technically, following a strong start, the Nifty rejected the 9-DMA and saw a rapid decline but was able to hold the 50-DMA of 18,144. On the downside, the area between 18,133 and 180,80 represents a significant demand zone. As long as Nifty trades above 18080, the bullish texture will hold but below 18080, a short-term trend reversal is possible.
The 20-DMA of 18,550 is a significant barrier on the upside, while 18,440 is an immediate barrier. To reverse the bearish scenario, the Nifty needs to break through this level. Bulls will anticipate a short covering move since the put/call ratio is oversold.
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