Mumbai: A steep decline in index heavyweights RIL, Infosys and financial stocks weighed on the benchmark equity indices on Friday in a session that saw Nifty form a ‘Bearish Engulfing’ candle on the weekly scale. Analysts said the index needs to stay above 11,300 level to avoid a steep fall next week.
On the bright side, auto stocks outperformed on hopes that a scrappage policy will be announced soon. Sensex tumbled 634 points to close at 38,357, while peer Nifty dropped 194 points to 11,334.
Among stock-specific moves, telecom major Vodafone Idea slipped after touching a 52-week high ahead of its board meeting and Future Group stocks continued to nosedive, logging steep losses for the week after its deal with RIL.
The dull times are probably here to stay, said analysts.
“It seems the market has now made an intermediate top and there could be a long and tiring correction going forward. Investors and traders are advised to lighten up and maintain a rational approach before putting their hard-earned money in this market,” said Nirali Shah, senior research analyst, Samco Securities
Here is a lowdown on what happened in Friday’s trade:
Financial stocks prove a drag
Financial stocks were one of the biggest drags for benchmark indices, amid the steep selloff in the overall market. Private lender Axis bank dropped 4.1 per cent to Rs 455.25, while top lender State Bank of India shed 3.1 per cent to Rs 206.65. Private lender ICICI Bank dropped 2.6 per cent to Rs 372.80, while bigger rival HDFC Bank shed 1 per cent to Rs 1,119.80.
Auto stocks outperform
Select auto stocks bucked the trend as they rallied on hopes the scrappage policy will be announced soon. Earlier in the day, media reports said the government will announce the scrappage policy soon., Top car maker Maruti Suzuki was the only gainer in the Sensex pack as it rose 1.70 per cent to Rs 7,191.50. Truck maker Ashok Leyland, which is likely to be one of the biggest beneficiaries of the scrappage policy, climbed 0.4 per cent to Rs 69.75. The fall was also less severe for two wheeler makers. Bajaj Auto closed 0.1 per cent lower at Rs 2,891, while peer TVS Motor was down 0.2 per cent to Rs 434.45. Hero MotoCorp shed 0.3 per cent to Rs 2,931.30.
Vodafone Idea turns volatile
Telecom major Vodafone Idea witnessed choppy trade, as it closed 4.4 per cent lower at Rs 12.01. Earlier in the day, it had logged a fresh 52-week high of Rs 13.45. The company’s board was scheduled to meet to consider fundraising through various options.
Future group stocks continue to slide
Future group stocks continued to drop, with most stocks falling by their daily limit for the fourth straight session. Future Retail, Future Enterprises and Future Lifestyle Fashions dropped 5 per cent each to Rs 112.45, Rs 17.30 and Rs 128 respectively. Future Consumer shed 4.5 per cent to Rs 10.91.
Dish TV stocks rise
The direct-to-home operator rose for the third-straight session after it posted a net profit of 75.94 crore in the quarter ended June, compared with a net loss of Rs 31.98 crore a year ago. The stock climbed 5 per cent to Rs 12.05 on Friday, taking total gains over the three sessions to 14.4.
Granules India at a new high
Drug maker Granules India, continued its journey northwards, as it rose for the fourth straight session, and logged a new all-time high of Rs 350.30. It pared some gains and closed 6.4 per cent higher at Rs 346.The stock has gained 12 per cent this week.
Promoter action: Mindtree, Just Dial
Promoters of IT firm Mindtree — N S Parthasarathy, Rostow Ravanan, Krishnakumar N, Akila Krishnakumar, Siddarth Krishnakumar and Subrotoi Bagchi — collectively sold a total of 6,98,549 shares of the company. The stock dropped 0.6 per cent to Rs 1,200.65. Promoter and director V S Mani acquired 1,04,500 shares of Just Dial, taking his total stake in the search engine company to 29.73 per cent. The stock closed 0.3 per cent lower at Rs 389.65.
Stocks that hit 52-week high
The number of companies hitting their 52-week highs, were more than double of those that tested 52-week lows, despite weak market sentiment. The 102 companies that logged 52-week highs included Adani Gas, Vodafone Idea, Amber Enterprises, Astrazeneca Pharma and Ramco Systems, among others.
Stocks that hit lower circuit
As many as 241 companies dropped by their daily limit on the BSE. They included Future Consumer, Future Retail, Future Lifestyle Fashions, Adani Green, Madhucon Projects and Max India, among others.
Stocks that flash ‘sell’ signal
As many as 106 stocks flashed sell signals on the BSE, as they dropped below the signal line on the MACD indicator. These included ICICI Bank, RBL Bank, DLF, Future Enterprises, HDFC, Bajaj Finance, Asian Paints and Future Retail, among others.
Where is Nifty headed?
Mazhar Mohammad, Chief Strategist for technical research & trading advisory at Chartviewindia.in, said a close below the 20-day EMA is clearly confirming that trend might have decisively reversed in the favour of bears. “Hence, unless Nifty50 closes above 11,584 level, all the rallies shall be used to create short positions,” he said. “On the downside, a breach of 11,300 in the next session can drag down the Nifty initially towards 11,111 levels with eventual targets placed around 11,000 levels. A close above 11,450 can be considered as an initial sign of strength,” he said.