Market Movers: Banks, sugar stocks slump; 34 scrips give sell signal

MUMBAI: A late sell-off saw the benchmark equity indices give up its morning gains to end in the negative territory as investors remained concerned about the impact of the ongoing second Covid-19 wave on the economy and possibilities of stricter lockdowns across the country.

While the government at the center has categorically denied the possibility of a national lockdown, the increasing death toll and creaking health infrastructure has led many to believe that a short national lockdown may be inevitable.

The Nifty50 index ended 0.9 per cent or 138 points lower at 14,496.50, while the BSE Sensex closed at 48,253.5, down 465 points or 0.9 per cent.

In the broader market, too, profit booking was visible as the Nifty Midcap 100 and Nifty Smallcap 100 index ended 0.4 per cent and 0.9 per cent lower, respectively.

Here are the major movers in today’s session:

Banks slump on asset quality worries
Media reports that banks and non-bank lenders have pleaded to the Reserve Bank of India to provide relief to borrowers in the form of a moratorium spooked investors lead to the Nifty Bank index erasing all the session’s gains to end 0.6 per cent lower. Reports suggested that banks have warned of increasing stress among small businesses to the RBI due to the ongoing restrictions.

Sugar stocks fall on profit booking
Shares of sugar producers saw hefty profit booking in the session after surging on Monday. Shares of Balrampur Chini, EID Parry, Avadh Sugar, Uttam Sugar Mill fell 3-10 per cent after surging 10-20 per cent on Monday. Sugar stocks have had a strong run in the past two sessions due to rising global sugar prices and expectations of strong demand.

SBI Life surges on bullish views
Shares of SBI Life Insurance Company ended 2.5 per cent higher and as the top gainer on the Nifty50 as analysts gave a bullish outlook to the insurer post its March quarter earnings announced on Monday. Brokerage firm Edelweiss Securities said that the Jan-Mar performance was a breakaway and that momentum remains in top gear.

Tata Chemical slumps on commentary
Shares of Tata Chemical fell 9 per cent after the company reported weak earnings for the March quarter and the profitability metrics disappointed. Further, the management’s lack of commentary on plans for setting up a lithium-ion unit for electric vehicle batteries also weighed on investor sentiments.

What gave the sell signal?
As many as 39 stocks listed on the National Stock Exchange gave a sell signal based on the MACD indicators including Hindalco Industries, Hindustan Zinc, Lupin,

, and Avanti Feeds.

What’s ahead for the markets?
Traders bought the out-of-money Put options of the Nifty50 index till the 14,200 strike price, suggesting that they expect the index to re-test that level again in the coming sessions. In the futures segment, traders added short positions in the May contract of the index as Open Interest rose 7.6 per cent.

“On the upside, there is stiff resistance at 14,700 and until we do not get past that, we will not enter a bullish trend. It is a tight range and traders need to be cautious in their approach,” said Manish Hathiramani, technical analyst at Deen Dayal Investments.

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