Sensex and Nifty 50 witnessed bloodbath yesterday with equity markets tanking over 2% as a global sell-off erased all gains made so far this month. On Monday, Dow Jones slipped over 500 points, FTSE 100 was down 3.38%. Analysts say that weaker global cues acted as a catalyst for domestic markets, and may continue to keep Sensex and Nifty 50 under pressure. European nations are fearing a second wave of the coronavirus, with the United Kingdom saying that the country is at a critical point. Domestically, only three of the 30 constituents on Sensex ended with gains on Monday, rest all were in the red.
Global cues: On Monday, Dow Jones plunged 509 points and NASDAQ was also down in the red along with S&P 500. FTSE 100 tanked 3.38% but it was not as bad as DAX of Germany which was down 4.37%. Equity markets across Europe were showing signs of weakness with all major stock markets ending deep in red. HSBC Holdings Plc fell to the lowest since 1995. SGX Nifty, on Tuesday morning, was up 30 points.
FII and DII watch: Foreign Institutional Investors (FII) sold stocks worth Rs 539 crore on Monday as equity markets took a beating, Domestic Institutional Investors (DII) followed close with selling of Rs 518 crore worth stocks.
Global banks shady business: Banking stocks in Europe were also affected by the unraveling of investigative reports. “European bank shares dropped following a story by the International Consortium of Investigative Journalists on lapses in suspicious activity reports by large Banks including JP Morgan, Standard Chartered, Barclays, Deutsche Bank, BNY Mellon,” said Deepak Jasani, Head of Retail Research, HDFC Securities.
IPO watch: Yesterday Dalal Street saw the opening of two initial public offerings (IPO), Computer Age Management Services (CAMS) and Chemcon Speciality Chemicals Limited. The bigger of the two, CAMS, was subscribed 82% at closing yesterday with retail investors oversubscribing their portion. Chemcon, however, was oversubscribed in less than three hours. At market closing the issue was subscribed 5.19 times with retail and NIIs oversubscribing their quota. Today, new age brokerage firm Angel Broking’s IPO will open for subscription.
Bulk and Block deals: Shares of the debutant Route Mobile were picked up by Goldman Sachs India Fund, Goldman Sachs Trust Emerging Markets Equity Fund, GS FDS Sicav GS Global, and Kuwait Investment Authority through bulk deals. Vanguard Group continued buying equity, this time picking up Deepak Nitrite and Tata Motors – DVR ordinary.
Outlook: “On Tuesday we expect the Indian market to remain under pressure. On the charts Nifty 50 index has changed its trading range, 11300 which was earlier support levels for the index will now act as resistance. The Nifty 50 index could fall to 11000 or 10900 levels if it breaks 11150. Our advice is to reduce weak long positions if Nifty bounces to 11300/11330 levels,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.