It was a terrible day for the market on Monday. A 770-point fall in the Sensex is something unexpected. Yesterday, it was time to play catch up with other global markets. And, we did that with great ferocity on the way down. It started okay, but then as the day progressed, we kept on getting weaker and weaker and finally closed virtually at the lowest point of the day, reports CNBC-TV18.
The Nifty, having rallied all the way up to 6,150-6,200 after breaking their 6,000 mark, has reverted into the trading band and has gone back all the way to sub 5,800 levels.
But that is only half the bad news. The real bad news is that the market breadth is extremely weak. The last few times the Nifty has closed in the red, we have not seen very poor breadth. In fact, midcaps have outperformed by quite an extent.
So, overall the fabric of sentiment was very strong. But today the midcaps have crumbled quite a bit and that too, in the second half of the session, particularly some of the liquid stock futures. The result is that there has been 200 advancing stocks to 1,000 declining stocks today.
The midcap index has lost 4% in today’s session, which is something not seen in a long while. So, it is bad going for the breadth of the market.
What was also a bit alarming is that the market fell on much larger volumes today, nearly 1 lakh crore, which is higher than the average of the last few days. So, due to poor breadth, higher volumes and largecap-led sell off, it looked like there was delivery-based selling and some heavy shorting of the Nifty futures, which was going on today.
It appears a bit oversold, the ferocity with which stock prices have fallen. But you never know with global markets. They have been looking quite jittery over the last few sessions.
The largecap names, from where the slide came in today are ONGC, Reliance, SBI or the heavyweights, looked weak. But three sectors stood out in their weakness. Metals, which have been going up sharply like Sterlite, SAIL, Hindalco, TISCO and Nalco, those stocks sold off today.
Telecom has been looking very volatile. Today was a bad day for stocks like Bharti, Idea, Reliance Communications and TTML. All of them came off quite significantly. The entire bunch of power stocks looked very weak, whether it is NTPC, Suzlon, Power Grid, CESC, or Neyveli Lignite.
So, power, metals and telecom are probably the key culprits in today’s fall. Not many largecap stocks stood out. May be the odd FMCG stocks like ITC or a Lever did not fall much.
On the midcaps, many of the popular stock futures, like RNRL, TTML and even IFCI towards the end;Ashok Leyland, TVS Motors actually sold down quite a bit towards the second half of the session. That would cause some anguish for the trading side of the market.
Infrastructure across the board was down, whether it is GMR, Punj Lloyd, JP Associates or Hindustan Construction. That entire space got a big hit today. And stocks like Essar Oil, RPL and Hotel Leela took knocks.
A few stocks stood out, notably the new listings - Kolte Patil and Kaushalya and the odd Suven Pharma. But generally, there was very poor showing from the midcaps after a long time.
It was a bad closing for the market. Has it got oversold? Is it right for a bounce? Or will global markets continue to remain skittish, which will put further pressure on our prices? Important morning of trade tomorrow but today was pretty bad.
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