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Factors that led Nifty end below 8,300 on the first trading day of FY21


After logging a handsome rally on Tuesday, once again the stock market witnessed pressure. Investors turned risk-averse amid heightened fears of economic depression led by the coronavirus pandemic.

The Sensex closed down 1,203.18 points or 4.08% at 28,265.31 and the Nifty tumbled 343.95 points or 4% at 8,253.80.

All sectoral indices ended lower, the Nifty IT index fell 5.5%, the FMCG and Media index fell over 3%, while other sectors fell in the range of 1-2%. However, market breadth remained in favour of the advances, as 937 stocks ended the day with gains, while 822 posted declines.

Meanwhile, equity inventors have lost Rs2.68 lakh cr as Sensex tanked 1,400 points in the morning trade. In March 2020, Sensex and Nifty have declined by 25%.

Here are the top factors behind the fall in Sensex and Nifty yesterday.

Coronavirus spreads footprints across the world: Globally, the infections have risen to 8.6 lakh and at least 42,300 people have died so far. The US, Italy and Spain have registered more deaths than China, where the outbreak started. India has reported a sharp rise in new coronavirus cases in the last couple of days, indicating a community transmission. The country has reported nearly 1,700 confirmed cases of Covid-19 including 51 deaths and 151 discharged patients.

FPI updates: Foreign portfolio investors (FPIs) pulled a record $15.9bn or Rs1.2 lakh cr out of the Indian debt and equity markets in March, according to NSDL data.

Auto sales down in March: Auto companies reported a sharp decline in March 2020 sales due showrooms and factories being shut down due to Covid-19 lockdown.
  • Maruti Suzuki India has reported a drop of 47% in total sales of 83,792 units in March 2020, over 1.58 lakh units sold in March 2019.
  • Ashok Leyland reported a 90% decline in total vehicles sales at 2,179 units in March.
  • Escorts led Agri Machinery Segment (EAM) total sales down 54.3% at 5,444 tractors in March 2020 as against 11,905 tractors sold in March 2019.
Banking stocks under pressure: Banking and financial heavyweights fell in today’s trade as investors feared that the lockdown triggered by COVID-19 will have a serious impact on businesses across the sectors and banks may see a rise in their bad loans due to this.

The Nifty Bank index cracked over 4.9%, while the Nifty Financial Services index slipped 4%.

Meanwhile, the brokerage firms have highlighted that the lockdown of the domestic and global economies due to the COVID-19 threat will have a meaningful impact on banks’ loan-book growth.

Kotak Mahindra Bank said in a conference call on Tuesday that it had warned of slippages rising and significant issues on the recovery front if the 21-day lockdown is extended for a period of 3-months. It has also expressed concerns about the retail unsecured business. The bank has been tight towards the wholesale lending business over some time. Also, with the advent of the Covid-19, the bank has stopped the growth of unsecured retail loan segment.

Stocks that hit a 52-week low on BSE: Jindal Steel & Power, PVR, TVS Motor Company, Cummins India, Future Retail, RBL Bank, Bharat Forge and Eicher Motors.

Gainers & Losers on NSE: Tech Mahindra, Kotak Mahindra Bank, TCS, Infosys and UPL were among major losers on the Nifty, while gainers were Hero MotoCorp, Grasim, Bajaj Auto, Bajaj Finance and Titan Company.

Global markets in red: Most major global markets closed in the red. In Asia, Japanese shares fell 3.48% as a rapid increase in infections in Tokyo fuelled speculation the government would place the capital on lockdown. Shares in South Korea hit hard by the virus, fell 1.34%. European indices were trading lower tracking weak cues from Asian counterparts. FTSE and CAC index dropped 4% each, DAX was trading 3.5% lower.

Yellow metal gains: On a weekly basis, gold posted its biggest weekly gain since 2008, helped by a dramatic plunge in the US Dollar, which drove up foreign demand for the precious metal. Oil held near $20 a bbl as Saudi Aramco’s output surged above 12 mn barrels a day, but Russia said it would refrain from further production hikes.

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