Nifty PSB crashes 9%; rupee breaches 75

Our Bureau Mumbai | Updated on April 12, 2021

All round selling sinks Sensex 1,700 pts; Nifty below 14,400

The market plunged further on Monday on the back of the worsening Covid situation with bank stocks leading the slide. Benchmark indices, after a negative opening, plunged over 3 per cent on Monday afternoon as the Covid-19 situation in the country and the State governments’ handling of the issue worried investors. Bearish signals from global markets further impacted sentiments. A majority of Asian markets were in the red.

At 1 pm, Sensex was at 47,883.85, down 1,707.47 points or 3.44 per cent. It hit an intraday high of 48,956.65 and an intraday low of 47,779.71. The Nifty 50 crashed 518.35 points or 3.49 per cent to 14,316.50. After briefly hitting an intraday high of 14,652.50, it slipped below the 14,300 mark to hit an intraday low of 14,283.55.

However, banks suffered the most on account of NPA worries following the Supreme court verdict last week.

The Nifty PSU Bank recorded the highest losses and was down 9.06 per cent. Nifty Realty was down 7.15 per cent. Nifty Bank was down 5.35 per cent.

Sensex nosedives over 1,400 pts in early trade; Nifty tests 14,400

Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “Since the second wave of the pandemic is turning out worse than expected, there is profound uncertainty about its impact on the economy and markets. Since the situation is the worst in economically significant Maharashtra, this can impact the market’s assumption of around 11 per cent GDP growth and above 30 per cent earnings growth. The situation may improve if cases peak soon and start coming down. But presently, this is a negative.

Pharma stocks remain resilient

Only pharma stocks managed to gain in an otherwise weak market. Amid rising coronavirus cases across the country, the Central government has decided to stop the export of Remdesivir antiviral injection to meet domestic needs.

Only four stocks – Cipla, Dr Reddy’s, Divi’s Labs and Britannia – were in the green on the Nifty 50.

Only Dr Reddy’s managed to remain in the green on the 30-pack Sensex while Tata Motors, Adani Ports, IndusInd Bank, State Bank of India and Bajaj Finance were among the top laggards on the Nifty 50.

The bad health situation and INR depreciation have improved prospects for the pharma & IT sectors, which are likely to remain resilient even during a market downturn. Economy- facing stocks are likely to be under pressure, said Vijayakumar.

Rupee suffers

The depreciation of the Indian rupee has further impacted market sentiment.

Kaynat Chainwala, Fundamental Research Analyst Currencies, Anand Rathi Shares and Stock Brokers, said: “Indian rupee spot slipped past the 75-mark to nine-month low of 75.15 today as rising Covid-19 cases sparked fears of a complete lockdown in Maharashtra and a few other States, dampening hopes of a faster recovery and increasing prospects of RBI’s ultra-loose monetary policy for a longer period. Already, the domestic currency has been battered by 2 per cent since the RBI unexpectedly announced QE style G-sec acquisition programme (G-SAP) last week with the first auction aggregating ₹25,000 crore to be held on April 15, 2021. This week, rupee is likely to weaken further as investors cautiously await India’s industrial output, manufacturing output, trade balance and inflation figures coupled with the first G-SAP auction scheduled on Thursday.”

On the sectoral front, all sectoral indices except Nifty Pharma were in the red. All broader indices were in the red. The Nifty Midcap 50 fell by 6.93 per cent while the Nifty Smallcap 50 was down 5.32 per cent. The S&P BSE Midcap index plunged 5.25 per cent while the S&P BSE Smallcap index was down 4.66 per cent.

Notably, the volatility index, the fear gauge shot up 15.71 per cent to 22.90 amid Covid worries.

Published on April 12, 2021

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