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Sensex falls for fifth day; here are the top factors

Nifty Realty and Nifty IT were among the biggest sectoral losers, shedding over 1% each.

ETMarkets.com|
Last Updated: Feb 27, 2020, 04.49 PM IST
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Trade set up may also face some volatility as traders will roll over their positions from February series to March 2020 series.
NEW DELHI: The rapid spread of coronavirus beyond China pulled domestic equity indices lower in Thursday's session.

BSE flagship Sensex shed 143 points to 39,745 and NSE barometer Nifty dipped 45 points to 11,633. India VIX, the measure of volatility in the market, fell 3.65 per cent to 17.59 on the expiry day.

Here are the top factors that dragged D-Street lower:

Coronavirus spreads arms
Market sentiment continued to remain under pressure amid growing concerns over the spread of novel coronavirus outside China. Overall, there have been more than 82,100 infections and 2,800 deaths worldwide, according to the latest toll from Johns Hopkins Center for Health Security.

Cases of the virus have appeared in nine new countries including Romania, Algeria, Austria, Croatia, Georgia, Greece, Norway, Pakistan and Switzerland. This brought the number of countries hit by the virus to more than 45. South Korea has announced more than 1,590 infections -- by far the largest outside China -- and 12 deaths.

GDP growth may stay flat
Some cautiousness also crept in among market participants after economists at State Bank of India said the Gross Domestic Product (GDP) growth will likely stay flat at 4.5 per cent in the October-December 2019. It also said that India faces the risk of getting impacted by the coronavirus epidemic economically because of its high reliance on Chinese imports for various goods.

FPIs on selling spree
Foreign portfolio investors offloaded shares worth Rs 3,337 crore on Wednesday, taking their total sales to over Rs 6,900 crore in past three days. Money managers believe domestic stocks will continue to see outflows if the global market rout does not end, even though the country has been relatively unaffected by the outbreak.

F&O expiry
Trade set up may also face some volatility as traders will roll over their positions from February series to March 2020 series. After trading at a premium in the first-half, the March Nifty futures contract closed at a discount to the current month contract, indicating that traders rolled over short positions to the next month, adding to the bearish tone of the market.

Weak global cues
Asian share markets extended losses on Thursday as the rapid global spread of the coronavirus kept investors on edge and seeking safety in gold and bonds. Rising fears of a pandemic, which US health authorities have warned is likely, had already wiped more than $3.6 trillion from global stock markets by Wednesday's close.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5 per cent and is down more than 4 per cent for the week. Australia's S&P/ASX 200 dropped 1 per cent by lunchtime and has lost 7 per cent this week. Japan's Nikkei fell 1.7 per cent to its lowest since October. The Hang Seng fell 1 per cent. Gold climbed 0.7 per cent.

Tech charts hint weakness
The daily chart on Wednesday showed that the Nifty has reached the lower Bollinger Band. Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas on Wednesday said, “The bands, however, are in expansion mode, which means that the index can continue to slide down along with the lower band. The Nifty is now stone’s throw away from the February low of 11,614, which can act as a support in the near term. Nevertheless the overall structure shows that the low is likely to break eventually.”

Market at a glance:
All sectoral indices were trading with losses on NSE. Nifty Realty and Nifty IT were among the biggest losers, down 1.01 per cent and 1.23 per cent, respectively. Nifty Media, Nifty Auto and Nifty Pharma were among other major losers.

In the 30-share pack Sensex, the breadth was skewed heavily in favour of the losers. Only four stocks were in the green while 26 traded with cuts. NTPC was the biggest gainer, up 0.64 per cent at Rs 109.90. Kotak Mahindra Bank, HDFC and L&T were among other gainers.

HCL Tech was the biggest loser in the pack, down 1.87 per cent to Rs 573 followed by its peer TCS that dipped 1.34 per cent to Rs 2,094. HDFC Bank, Mahindra & Mahindra and ICICI Bank were among other major losers.

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