Stock Market Highlights: Sensex slumps 870 points lower, Nifty ends below 14,650 as banks, auto, FMCG stocks drag

Shrikant Chouhan, Executive Vice President (Equity Technical Research), Kotak Securities 

Breaking all the important support, the market went back to 14,450 levels and came back. For the last 20 days, 14,450 has been working on an important basis. From now on, 14,450 would act as a trend decider. However, the market may return to around 14,450 or 14,500 and the reason is that today’s fall was severe. All sectors except Nifty IT and Nifty Metals were down. Market breadth was also 1: 2. Pandemic sensitive sectors are heavily down for example banks, auto and real estate. The levels of 14,670 and 14,730 will be major obstacles and it is advisable to reduce weak long positions around the same. Trends above 14,900 can be subverted.

Ajit Mishra, VP – Research, Religare Broking

The week started on a negative note for the Indian markets mainly due to a sharp surge in COVID-19 cases across the country. Despite, stable global cues, the Indian indices lost their ground and ended with losses of nearly 1.5 percent to end at 14,638 levels. The sharp surge in COVID-19 cases has dented investor sentiments and has increased fear of harsh restrictions which would impact economic activity. Going forward, government actions to curb the surge would be one of the important factors to watch out for investors. Further, the upcoming RBI monetary policy would be actively tracked by investors. We expect the RBI to maintain its dovish stance and leave key rates to be unchanged.

Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments

We broke the level of 14,500 on an intra-day basis but the Nifty was quick to recover from there and has closed above that support level. We are now in the crucial territory. If we disrespect today’s low, we can fall further to 14,250. On the upside, until we do not conquer 14,950 we will not be in a bullish market and the index will continue to remain sideways with a bias on the downside.

Market At Close

– Market Slips As Indian States Put Restrictions On Rising COVID Cases

– Financials Lead Mkt Fall With Sensex & Nifty Slipping Over 1% & Nifty Bank Over 3%

– Market Breadth Favours Declines With Adv-Decline Ratio At 1:2; Midcap Index Down 1%

– Sensex Falls 871 Points To 49,159 & Nifty 230 Points To 14,638

– Nifty Bank Slips 1,179 Points To 32,679 & Midcap Index 319 Points To 23,799

– IT Gains While Other Sectoral Indices Close In The Red; Volatility Index Surges 6%

– 37 Of 50 Nifty Stocks Close Lower; 6 Of Top 10 Losers Are Financials

– HCL Tech, Britannia, TCS, JSW Steel & Infosys Top Nifty Gainers Today

– Infosys Surges To A Life High With Market Cap Hitting `6 Lakh Cr

– JSW & Tata Steel Continue The Winning Steak With Both Stocks At Multi-yr Highs

– Adani Ports Up 1% On Co’s Acqn Of Remaining 25% Stake In Krishnapatnam Port

– Hospital Cos Rise As Number Of COVID Tests Rise; Dr Lal Up Over 6%

– Marico Falls 4% From Highs As Co Expects Dip In Margin On Input Cost Pressure

– Hotel & Multiplex Stocks Under Pressure On COVID Restrictions; PVR Falls Over 4%

– Airline Stocks Fall As Well On COVID Concerns; IndiGo & SpiceJet Down 4-5%

Closing Bell | The Indian benchmark indices ended sharply lower on Monday as concerns over rising COVID-19 cases and new restrictions imposed in various states spooked investors. The Sensex slipped 870.51 points, or 1.74 percent, to 49,159.32, while the Nifty ended 229.55 points, or 1.54 percent lower at 14,637.80. Broader markets, smallcap and midcap indices ended over 1 percent lower each.

Heavy selling was witnessed in banks, auto, FMCG, realty and financial sectors. Buying was witnessed in Nifty IT and Nifty Metal indices. On the Nifty50, Bajaj Finance, IndusInd Bank, SBI, Eicher Motors and Mahindra & Mahindra were the top losers, while HCL Technologies, TCS, Wipro, Britannia Industries and Infosys were the top gainers.

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Market Watch: Nischal Maheshwari, Centrum Broking

We continue to believe that there are more legs to the steel rally and we are still seeing that prices are going up, margins are going up on QoQ basis. Therefore, there is a strong demand in the sector. We are initiating coverage on the whole sector and we believe there is 20-30 percent upside in most of these stocks.

Metals Focus sees pick up in gold demand in June, July

Chirag Sheth of Metals Focus believes gold manufacturers and retailers are now looking at building up inventory on the back of extended wedding season this year. “As demand picked up in January and February, there was hope that this will continue in Q2 given the fact that we have got an extended wedding season this time around up till June. So a lot of manufacturers and retailers are now looking at building up inventory,” he said.

“This has led to the phenomenal jump in gold imports that we have seen,” he added. He expects a bit of slowdown in demand. “We expect a bit of slowdown in the demand given the fact that lot of states and major gold consuming centres are entering lockdown. Also because of elections – whenever elections happen there is a bit of impact on gold demand given the restriction of movement of cash. Probably in April and May we will see a bit of reduction in imports and then pick up in June and July,” he explained. Read more.

Indian Oil Corp buys its first Johan Sverdrup crude cargoes: Report

State-run refiner Indian Oil Corporation (IOC) has bought 4 million barrels of Norway’s Johan Sverdrup crude for the first time via a tender as it speeds up diversification of crude imports, two trade sources told Reuters on Monday. IOC will take delivery of 2 million barrels each of the North Sea crude in May and June, one of the sources said. Further details on the trades were not yet clear. The move followed the Indian government’s call to cut dependence on crude from the Middle East in an escalating stand-off between India, the world’s third-largest crude importer, and Saudi Arabia, the de-facto leader of the Organization of Petroleum Exporting Countries (OPEC).

Steel Strips Wheels sees highest rim sales in March; expects FY22 export revenue at Rs 600 cr

Steel Strips Wheels is up 80 percent in the last year. The company saw its highest-ever rim wheel sales in the month of March. Speaking to CNBC-TV18, Dheeraj Garg, MD of the company said that they have seen a 5-10 percent growth every month and are expecting sales of 23.5 million units in the next year. “In terms of month-on-month (MoM) growth, it has been almost about 5-10 percent from each month to the other month. This financial year we have done close to 13.7 million wheels and in the next year, we are projecting 23.5 million wheels. The main growth drivers for this are aluminium wheels, CV wheels, and exports; all three segments are growing by more than 100 percent compared to the prior year,” he said. He also said that exports were around Rs 350 crore in FY21 and is expecting it to double in FY22. He also expects more than 100 percent growth in volumes in FY22. Read more.

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Parag Milk Foods to raise Rs 316 crore from IFC, Sixth Sense Venture Advisors, promoters

Parag Milk Foods on Monday said it plans to raise a total of Rs 316 crore by preferential allotment of equity shares, foreign currency convertible bonds (FCCBs) and other instruments from IFC and Sixth Sense Venture Advisors and promoters. IFC and Sixth Sense Venture Advisors will invest Rs 155 crore and Rs 50 crore, respectively. Promoter and family will further invest Rs 111 crore, maintaining the promoter stake at 46 percent, Parag Milk Foods said in a regulatory filing.

Parag Milk Foods said this fundraise is subject to shareholder’s approval in the ensuing extraordinary general meeting scheduled on April 26, 2021, as well as regulatory approvals. Parag Milk Foods said International Finance Corporation (IFC) is proposing an investment of up to Rs 155 crore by way of subscription to preferential issue of equity shares and subscription of FCCBs in addition to a proposed subscription to NCDs of Rs 150 crore committed in December. Read more.

Bank of India | The Board of Directors of the bank will be considering preferential allotment of equity shares of Rs 3,000 crore to the Government of India after obtention of shareholder’s approval in the Extra Ordinary General Meeting and other related regulatory approvals.

Motilal Oswal on Bharat Electronics

We forecast a revenue/EBITDA/PAT CAGR of 14%/14%/16% over FY21–23E. We have built in a sufficient margin cushion as we assume an EBITDA margin of 19.2%/19.1% for FY22E/FY23E (v/s 21.1% in FY20). At CMP, the stock trades at FY22E/FY23E P/E of just 15x/14x – despite having RoE/RoCE of ~17%/18%, dividend yield of ~3%, and FCF yield of 3.5–6%. Maintain Buy, with unchanged target price of Rs 150 (on 16x FY23E EPS)

Market Watch: Sameet Chavan of Angel Broking

Relaxo Footwears is one stock that looks good. We are seeing some good buying interest in this counter from lower levels. We expect Relaxo to do well, it has already confirmed a bullish flag pattern breakout and from hereon we expect this outperformance to continue. Rs 968-990 levels are the levels to watch out for in the upward direction for Relaxo and stop-loss can be placed around Rs 878.

On the short side we like IndiGo, we are seeing some selling pressure at higher levels and the stock has managed to breach its important support on hourly charts so we expect IndiGo to correct further. Rs 1,610 could be the stop loss levels, any bounce back could be a selling opportunity, we expect this stock to head towards Rs 1,450.

Goa Carbon resumes operations at Bilaspur plant

Petcoke maker Goa Carbon on Monday said that operations at its Bilaspur unit in Chhattisgarh have resumed. ”The normal production at the company’s Bilaspur unit… has resumed from April 3, 2021,” Goa Carbon said in a regulatory filing. On February 24, the company had informed its Bilaspur unit had been temporarily shut down for maintenance work. Goa Carbon is in the business of manufacture and marketing of calcined petroleum coke. The company is a regular supplier to aluminium smelters, graphite electrode and titanium dioxide manufacturers, as well as other users in the metallurgical and chemical industries.

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Positive on IT, FMCG, pharma; like ITC and Tech Mahindra, says Prakash Diwan

FMCG, IT, and pharmaceuticals continue to be top areas to go out and fish, said market expert Prakash Diwan on Monday. Diwan believes ITC certainly stands a very significant chance to benefit out of the lockdown. He likes Tech Mahindra in the IT sector while says that pharma is offering a lot of value on the API, formulation side. “You will definitely get a little bit of that opportunity to buy into some of the stronger pharmaceutical names as well,” he said in an interview with CNBC-TV18. Diwan believes autos will get impacted because of the lockdown. Read more here.

Escorts’ tractor sales on a smooth road; management expects momentum to continue

Escorts posted very strong 10 percent tractor sales growth in March. In fact, FY21 ended on a strong note with total tractor sales rising 24.1 percent during the year. Bharat Madan, Group CFO of the company, in an interview to CNBC-TV18, said that the demand continues to be robust and expects tractor sales to continue to be strong for the next 6 months. “The general rural sentiment is quite strong. If you look at the harvest which is happening, most of the harvest is done. So, with good traction coming in from the rural, the demand continues to be strong and robust. So, we expect the next 6 months to continue to look strong on the tractor side,” he said. Watch here.

Gaurav Garg, Head of Research at CapitalVia Global Research

The market opened on a flat note following the mixed sentiments in the markets but could not maintain the higher levels and tumble down below 14,500. The increase in corona cases has led to negative sentiments in the domestic market. On the other hand, US markets closed higher as the unemployment rate has fallen to 6 percent. The Asian market was mostly trading in green following the US markets and positive overall sentiments.

We can expect a recovery in the Indian market as well and the market can be expected to be in the range of 14,350-14,900 in the coming week. Although the increase in corona cases can give an opportunity to bears to make a strong grip on the market.

Investors’ wealth tumbles over Rs 4.54 lakh cr as markets crash

Investors’ wealth tumbled over Rs 4.54 lakh crore in morning trade on Monday as markets crashed amid a sharp spike in coronavirus cases in the country. The 30-share BSE benchmark index plummeted 1,449.03 points to 48,580.80 in morning trade. Following this, the market capitalisation of BSE-listed companies dived Rs 4,54,987.72 crore to Rs 2,02,71,414.07 crore. The BSE midcap index and small cap index were trading over 2 per cent lower.

Financials most vulnerable to COVID 2nd wave; positive on IT: Raamdeo Agrawal

Raamdeo Agrawal, Chairman of Motilal Oswal Financial Services on Monday said that the financial sector is the most vulnerable to the second wave of COVID-19 as they haven’t recovered from the impact of the first wave fully. “Financial sector which suffered the most last time, again they are vulnerable because they will get impacted. Less so this time, but clearly even now that is the most vulnerable part of the economy, particularly the unsecured loans and the lower end of the population,” he said in an interview with CNBC-TV18.  The market veteran is however positive on the IT sector and expects quarter-on-quarter (QoQ) earnings growth to be more than 5-6 percent. Click here to read more.


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