Market Movers: Banks, RIL help bears; some blue-chips give sell signal

Market Movers: Banks, RIL help bears; some blue-chips give sell signal

MUMBAI: A broad-based selloff in the domestic equity market saw the benchmark indices take deep cuts in Wednesday’s session as investors booked profits ahead of the Union Budget.

The losses were amplified by likely selling by foreign portfolio investors, who have been the main driving force behind the stock market’s breakneck rally over the past few months.

The Nifty 50 index ended 1.9 per cent or 271.40 points lower at 13,967.50, while the BSE-Sensex closed at 48,347.59, down 1.9 per cent or 937.66 points. Both the benchmarks erased their gains for the year so far.

Selling pressure, however, appeared limited to blue-chip and midcap stocks as the Nifty Smallcap 100 index defiantly ended 0.2 per cent higher at 7,272.55 points.

Here are the major movers in today’s session:

Banks gripped by selling pressure

Shares of banks, particularly, private banks, led the selloff in the market as investors looked to take profits after the sharp run-up in the sector in recent months. Concerns on the asset quality front continue to persist for many lenders despite recent signs of abating stress. The Nifty Bank index closed 2.9 per cent lower.

RIL’s problems continue

There was no rebound on the offing for shares of India’s largest conglomerate as they tanked another 2.4 per cent, following Monday’s fall of over 5 per cent, given the negative earnings outlook from some analysts. The stock tested its 200-day moving average for the first time since February and was tantalisingly close to entering a bear market.

FMCG stocks hold fort amid selling

Shares of fast-moving consumer goods companies showed strength in a weak market after the announcement of firm earnings from Emami and Marico. The gains were also helped by likely defensive buying from investors fearing more market volatility in the coming sessions. The Nifty FMCG index closed 0.3 per cent higher.

Cyient shrugs off weakness

Shares of the mid-cap IT company soared 11 per cent, and were the top gainer among the Nifty 500 components. The jump was helped by the strong outlook given by many analysts after the company’s Q3 earnings.

Over 100 stocks hit 52-week highs

Despite the sharp selling seen in the market throughout the session, as many as 102 stocks managed to hit 52-week highs in the day, including Orchid Pharma, Tata Tele, Route Mobile and Bajaj Auto.

What gave sell signal?

As many as 48 stocks listed on the National Stock Exchange gave a sell signal based on the MACD indicator, including Bank of Baroda, Bharti Airtel, Eicher Motors and Bharat Forge.

What’s ahead for the market?

Traders actively bought out-of-money put options of the index up till the strike price of 13,500, suggesting that they expect the index to find support at that level if the selling spree continues.

On the technical front, Shrikant Chouhan of Kotak Securities said, the Nifty 50 has taken support at the 13,950 level, and it is possible that the index may give a healthy bounce-back to 14,400-14,500 points ahead of the Budget or the day of the Budget. “Certainly, traders can take long positions at the moment as the risk-reward ratio in the very short term is looking attractive,” he added.

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