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Metals, financials drag indices; Sensex falls 338 pts, Nifty holds 14,900

Heavyweights HDFC Bank, ICICI Bank, Reliance Industries, Axis Bank, Kotak Mahindra Bank, TCS, and HDFC contributed the most towards the indices' losses

Image SI Reporter New Delhi
MARKET LIVE: Sensex dips 350 pts; Nifty below 14,900; Nifty Metal slips 3%

Stock market updates: Benchmark indices turned sharply lower during the fag-end of the session, after staying flat for better part of the day, as US stock futures indicated a weak session on Wall Street later today. 

Dalal Street investors took cues from Dow Jones Futures, that tumbled nearly 200 points in early pre-market deals, and booked profit largely in metal, financials, and FMCG counters. S&P 500 and Nasdaq Futures also slipped 20 points and 60 points, respectively, suggesting a third straight session of declines in the US. That apart, weekly expiry of the F&O contracts and FPI selling added to the volatility.

By close, the BSE barometer of 30-shares was down 338 points, or 0.68 per cent, at 49,565 levels while the Nifty50 index quoted at 14,906 levels, down 124 points or 0.83 per cent. In the intra-day trade, the indices hit a low of 49,497 and 14,885, respectively.

Heavyweights HDFC Bank, ICICI Bank, Reliance Industries, Axis Bank, Kotak Mahindra Bank, TCS, and HDFC contributed the most towards the indices' losses as they declined between 0.5 per cent and 1.5 pe cent.

Individually, Tata Steel, Hindalco, Coal India, Britannia, ONGC, IOC, Sun Pharma, Power Grid, UPL, and Tata Motors were the top laggards at the bourses in the large-cap space while M&M, Cipla, BPCL, IndusInd Bank, Titan, L&T, and SBI remained top gainers. 

Sectorally, metal stocks witnessed profit booking after China said it will strengthen its management of commodity supply and demand to curb any "unreasonable" increases in prices. Prices for commodities such as coal, steel, iron ore and copper – of which China is the world's biggest user – have surged this year, fuelled by post-lockdown recoveries in demand and easing liquidity globally.

In effect, the Nifty Metal index sunk over 3 per cent with Tata Steel, Steel Authority of India (SAIL), and Jindal Steel and Power (JSPL) sliding 5 per cent each, while Coal India, National Aluminium Company, NMDC, Vedanta, and JSW Steel declining between 2 per cent and 4 per cent in the intra-day trade. READ MORE

That apart, the Nifty Bank, Financial Services, Private Bank, and FMCG indices slipped nearly 1 per cent each. On the upside, the Nifty Realty index remained gainer for second straight day and ended 1 per cent higher on the NSE. 

Cheap valuations, however, drew investors towards smallcaps. The S&P BSE SmallCap index hit a record high of 23,093 levels in the intra-day trade today but closed at 22,980.5 levels, up 0.22 per cent. Among individual stocks, Automotive Axles, Gayatri Projects, Shakti Pumps, Pokarna, TV Today, TCI Express, Just Dial, Walchandnagar Industries, SORIL Infra Resources, H.G. Infra Engineering, Shivam Auto and Emami Realty rallied between 10 per cent and 20 per cent in the intra-day session today. READ MORE

The S&P BSE MidCap index, meanwhile, ended 0.12 per cent lower today.

Global markets
World stocks traded with gains across most regions. In Europe, the pan-European STOXX 600 index added 0.5 per cent while Germany's DAX was up 0.24 per cent. France's CAC 40 index, too, climbed 0.15 per cent in early deals.

In Asia, barring South Korea's Kospi, which slipped 0.34 per cent, all other major indices ended with gains. Japan's Nikkei was last up 0.2 per cent, Australia's S&P/ASX200 advanced 1.3 per cent, and China's CSI300 index rallied 0.3 per cent. 
5:21 PM

TECH VIEW :: Ashis Biswas, Head of Technical Research at CapitalVia Global Research

The market continues to witness a lack of upside momentum and corrected to close the gap around 14900 it has seen as on 18-May-2021. As of now, the short-term technical condition of the market appears like a correction in the process. While it is subject to further price action evolution, It is prudent to wait for a decisive breakout above 15000 before adding to the existing position, if any. Once this level is met, the market to gain momentum, leading to an upside projection till the level of 15400.
5:17 PM

MARKET CLOSING COMMENT :: Deepak Jasani, Head of Retail Research at HDFC Securities

Indian benchmark equity indices ended lower for the second consecutive session on May 20. Nifty opened mildly higher but sold off in the first few minutes of trade. It later attempted to rise but made lower top, lower bottoms. Post 1400 Hrs, it fell sharply and closed near the low of the day. At close, the Nifty was down 124.20 points or 0.83% at 14,906.
Volumes on the NSE were lower than recent averages. Among sectors, Realty was the only major gainer while Metals, Banks and Oil & Gas were the main losers.
Nifty fell amidst lower than average volumes with advance decline ratio becoming equal. In the process, the upgap formed on May 18 has been filled, nullifying the sharp bullishness. However nervousness out of recent data on inflation and cryptocurrency sell-off seems to have tapered off or already in the price. 14824-15009 is the near term band for the Nifty. 
5:05 PM

TECH VIEW :: Sumeet Bagadia, Executive Director at Choice Broking

Technically, the nifty index has failed to sustain above the Falling Trendline and closed below the 15000 marks. Moreover, the index has also faced immediate resistance at the Upper Band of Bollinger formation that suggests a bearish move for the near term. In addition, the index has also confirmed Shooting Star candlestick pattern breakdown, which is a sign of further correction. An oscillator Stochastic showed a negative crossover on the daily chart, which indicates some correction for the upcoming trading session. At present, the Nifty is holding support at 14,750 while an upside resistance seems to be at 15,150.
4:50 PM

TECH VIEW :: Nagaraj Shetti, Technical Research Analyst at HDFC Securities

The weakness of Thursday seems to be in line with the positive chart pattern of the market. If a crucial support of 14900 is broken decisively on the downside, then the bets of upside breakout could be off and more weakness could be set in. A sustainable upmove from the support of 14900 is likely to pull Nifty towards 15140-15200 levels in the short term.
4:36 PM

MARKET CLOSING COMMENT :: Vinod Nair, Head of Research at Geojit Financial Services

Domestic market witnessed selling due to lack of further domestic cues and weak global market.  Wall Street has extended its losses as US treasury yield and dollar index jumped post the release of a watchful Fed minute, which was below the expectations. Fed minutes signalled a plausible slowdown in bond buying “at some point”, a shift in policy in the future, which will have an implication on EMs
4:26 PM

TECH VIEW :: Rohit Singre, Senior Technical Analyst at LKP Securities

Index showed profit-booking pressure second day and given closing at 14906 with loss of nearly one per cent & formed a bearish candle for the second consecutive day. It seems the index has to retest its descending channel breakout zone if turned right then we may see good pull back from current levels towards the immediate hurdle zone of 15000-15100 but if failed to sustain some more profit booking can be seen towards nearest support zone of 14850-14775
4:16 PM

MARKET CLOSING COMMENT :: Ajit Mishra, VP - Research, Religare Broking

Markets witnessed profit taking for the second day in a row and lost nearly a percent. After opening on a flat note, the benchmark traded lackluster however selling pressure in the latter half pushed the index lower.  On the sector front, Metal, Banking & Oil & Gas were the top losers wherein Consumer Durables and Capital Goods ended with gains. The broader market indices outperformed the benchmark and ended almost on the flat note.
Weak global cues are weighing on the sentiments for the last couple of sessions and we may see further choppiness in global markets on inflation fear. However, reduction is COVID cases in India is certainly comforting the participants. We believe the Indian markets could outperform in the near term given it has underperformed when the global markets were rallying. We suggest keeping a check on leveraged positions and focusing more on managing the overnight risk.  
4:05 PM

MARKET INSIGHT :: Should you chase the rally in small-caps?

S&P BSE SmallCap index, which hit record highs of 23,093 today, is up by 120% in the last 1 year and almost 200% from the lows of April 2020. Small caps stocks were heavily impacted during the Covid sell off in April 2020. Despite a stellar rally in the large-caps last year, the midcaps & small caps did not participate in the initial bull run.

However, over the last 2-3 months, we have seen a bull run in mid-caps as well as small-caps. The main reason for the bull run in small cap is that the premium gap between large cap and small cap hit the lowest in the month of February 2021. In small cap, many stocks are trading at higher side of their last 10-year valuations but some of the stocks are trading at attractive valuation like LT foods. That said, we suggest retail investors to be cautious on small cap stocks as we expect it time to be stock specific rather than index oriented.

Views by: Yash Gupta, Equity Research Associate at Angel Broking
4:00 PM

Investment strategy :: Metal index cracks 3%; what should investors do now?

S&P BSE Metal index has seen some profit booking as the metal index has become 3x in the last 1 year, We have seen a one-sided rally in the metal index from lows of 6,145 in May 2020 to highs of 20,429 in May 2021. We may see some healthy corrections of 10%-15% from highs in the metal index as well as in stocks. Stocks like Tata Steel and Jindal steel leading the metal index, down by 4% each, while VEDL and JSW steel down by 1.5% each.
Fundamentally, stocks look stretched on the higher side despite above expectation results from metal companies in this quarter and several companies are focusing on deleveraging their balance sheet by paying off the debt within the next 1 year.
We expect this correction in the metal index can be 10%-15%. That said, the stocks will rebound from there and, thus, we suggest investors to be invested in the sector and expect very good returns in the next couple of years.

Views by: Yash Gupta, Equity Research Associate at Angel Broking 
3:54 PM

BSE Snapshot :: Advance to decline ratio favours bulls

3:53 PM

Volatility Alert

India VIX ends 1.7% higher at 19.65 levels.
3:52 PM

Broader market :: S&P BSE SmallCap index ends near record peak level

The index hit fresh record high of 23,093 levels earlier today

3:50 PM

NSE Snapshot :: Top Nifty stocks that remained buoyant amid sell-off

3:47 PM

Heavyweights that dragged the Sensex today :: RIL, HDFC Bank, ICICI Bank slip up to 1.5%

3:44 PM

Sectoral trends on the NSE :: Trend remains largely negative

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First Published: May 20 2021 | 8:03 AM IST

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