Samvat 2074 sees dull start as Muhurat trade hits 10-year low

Samvat 2074 saw the worst Muhurat trading session on Dalal Street in over a decade. Key benchmark equity indices S&P BSE Sensex and CNX Nifty of the National Stock Exchange (NSE) fell 0.6 per cent each from their record high levels.

A 2 per cent crash in Hong Kong’s stock markets on Thursday led to a global equity sell-off, spreading panic among domestic traders too.

“I do not remember any other Muhurat trading session in the past 10 years when markets crashed so much; usually the session closes on a flat note due to low volumes,” said Deven Choksey, founder-Chairman, KR Choksey Investment Managers.

“Thirty years ago this day, on October 19, stock markets had crashed between 10-23 per cent globally. But they recovered fully on October 22. This time too, something similar is expected and a strong bounce-back could follow any further crash,” he added.

Muhurat trading on Diwali is an age-old tradition on Dalal Street and is conducted for an hour in the evening.

Despite the setback of demonetisation and the GST regime, the Sensex gained 4,642.84 points, or 16.61 per cent, in the Hindu Samvat year 2073, while the broader NSE Nifty surged 1,572.85 points, or 18.20 per cent.

The markets rose in line with the global recovery in stocks, riding the central bank’s monetary stimulus and hopes of a strong earnings recovery.

Metal, bank stocks dip On Thursday, the Sensex fell 194 points to close at 32,389. The Nifty was down 64 points and closed at 10,146. Sharp losses in metal and banking stocks weighed on the market. The banking index on the BSE fell 1.2 per cent and the metal index was down 0.90 per cent.

Axis Bank, which reported a surprise jump in its non-performing assets on Tuesday, crashed by 10 per cent to close at ₹458. The bank’s results were a catalyst that turned market sentiment in the favour of bears.

All the major stock indices in Europe and the US were down between 0.5 and 1 per cent. A 1 per cent fall in the markets in a single trading session has not happened globally in over a month,.

“Axis Bank’s results surely changed market sentiments,” said Sudip Bandyopadhyay, Chairman, Indi-trade Capital. “Next week’s derivative expiry, too, is likely to weigh on the markets.”

Despite historically high valuations, most domestic brokerage houses have given a bullish target for the next year, too. Kotak Securities has a target of 11,850 for the Nifty, while on the downside, it sees 9,400 as a major support level for the market.

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