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Monday, April 19, 2021

Biggest winners from March lows fall most; media takes biggest hit

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NEW DELHI: “New investors! Hope you got the real taste of stock markets. Moves up in steps, comes down in an elevator!”

As Sensex cracked over 800 points on Monday, this was what a market participant
quipped on Twitter addressing the first-time investors who came to the market during the pandemic.

In Monday’s crash, which was reminiscent of a number of smaller corrections that the market saw in February and March, sectors that had surged the most in last few months were the biggest losers.

Nifty Media Index was the biggest sectoral loser, down 5.85 per cent, thanks to profit booking in shares of multiplexes and major movie producers, as the government refrained from allowing them to open cinema halls in the latest version of ‘unlock’. The index had jumped 71 per cent from its 52-week low in early April.

PVR shed 9 per cent and its peer Inox Leisure 7 per cent. TV18 Broadcast, Sun TV and Jagram Prakashan were among other top losers, falling 5-7 per cent.

Nifty Pharma Index, which is by far the biggest gainer advancing 86 per cent from its 52-week low hit on March 13, was the second biggest sectoral loser on Monday, slumping 4.67 per cent. Top names from the index – Sun Pharma, Aurobindo Pharma, Cipla and Divi’s Labs- fell 5-8 per cent.

Banking indices also suffered badly, falling more than 3-5 per cent on NSE. If one were to calculate the fall from the day’s high, the picture gets even more gloomy. The pressure also mounted as the EMI moratorium ends today, which means lenders will start recognising defaults now.

“On the financial front, the picture is still hazy. The moratorium ends today. We will have figures come out of banks as to how many of their customers actually started paying and how many are not paying even at the end of the moratorium. So that will give some picture as to what kind of NPA stress or restructuring stress will come through going forward,” said Sandip Sabharwal, independent market analyst.

“The picture for financials is not very clear at this stage. There is stress. There will be stress on their balance sheets over the next two-three quarters,” he said.

Nifty Private Bank Index fell 3.33 per cent, Nifty PSU Bank 4.77 per cent and Nifty Bank 3.14 per cent. These three indices had registered 48-60 per cent gains from their 52-week lows in the rally.

Nifty Metal and Nifty Financial Services indices fell 4 per cent and 3 per cent, respectively, on Monday. Nifty Smallcap, which had surged 83 per cent from March lows, was down nearly 4.75 per cent.

Analysts believe the correction was long overdue and some of these sectors may continue to fall now. “Almost all the sectors traded with cuts. Metals along with PSU banks may see further profit taking. The Smallcap index has tested critical resistance, hence we are seeing profit booking,” Ajit Mishra, VP – Research at Religare Broking, said.

Overall, the 30-share pack Sensex plunged 1,600 points from its day’s high, but ended down 839 points for the day to 38,628. Its broader peer Nifty fell 260 points to 11,387. India VIX, indicator of fear in the market, soared 27 per cent to 23.32 levels.

But, optimism refuses to die down in the market. Some analysts still sounded bullish, as were the investors who made most of the Monday’s fall to place buy orders.

“This too shall pass!” This is how the Twitter user mentioned at the beginning ended his tweet with.

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