India reported over 170,000 new cases on Monday and over 1,500 new deaths, which led to concerns that governments may not have any option left but to undertake temporary lockdowns. Delhi earlier today announced a week-long lockdown in the city to stem the rise in cases.
For the day, the Nifty50 index closed 1.8 per cent, or 258.4 points, lower at 14,359.45, while the BSE-Sensex ended at 47,949.4, down 882.6 points or 1.8 per cent.
Here are the major movers in today’s session:
Pharma stocks show resilience
In the wake of the ongoing healthcare crisis in the country, investors flocked to the safety of pharmaceutical companies that are seen benefitting from the surge in demand for critical drugs over the past few weeks. The Nifty Pharma index closed 0.2 per cent higher led by shares of Cipla, Dr Reddy’s Laboratories and Aurobindo Pharma.
Oxygen suppliers surge
Shares of industrial oxygen suppliers such as Linde India, National Oxygen, and Bhagwati Oxygen hit their lifetime highs on the back of surge in demand for medical oxygen across the country. The government has directed all oxygen supplies in the country to be redirected towards medical use barring some industries.
Aviation stocks plummet
Shares of aviation companies SpiceJet and InterGlobe Aviation fell over 4 per cent on rising concerns that the surge in COVID-19 cases and renewed localized restrictions will threaten the nascent recovery in the sector seen over the past six months. The second wave has raised concerns over the survivability of several service sector companies.
Banks sink on asset quality worries
The biggest burden of the sell-off was felt in shares of banks with the Nifty Bank index slumping 2.4 per cent on concerns that the second wave will unleash new non-performing loans on the sector, which is still to cope with the rise in bad loans due to the national lockdown last year.
What gave sell signal?
As many as 37 stocks listed on the National Stock Exchange gave sell signals based on MACD indicators including NALCO, NMDC, Titan Company, Cyient and Tanla Platforms.
What’s ahead for the market?
Traders aggressively bought out-of-money put options of Nifty50, suggesting that they expect today’s losses to sustain in the coming sessions. In the futures segment, traders unwound long positions in April contract of Nifty50 as open interest fell 2 per cent.
“Since the upside is capped at 15,000, a view on the long side can only be taken post that level. Until then the index will remain sideways with a downward bias,” said Manish Hathiramani, technical analyst at Deen Dayal Investments.