Sensex slumps 435 points, Nifty slumps below 15,000-mark as profit booking takes rootFebruary 20, 2021
Market benchmarks declined on Friday for the fourth consecutive session, ending the week down by 1.2%, as the mood turned cautious on account of weak global cues and rising bond yields in India as well as the US. The Sensex tumbled 435 points while the Nifty slumped below the 15,000-mark as markets buckled under selling pressure.
Rising crude oil prices and fears of rising inflation also impacted the performance of the markets this week. On Friday, the markets in Taiwan and Japan were down by 0.5% and 0.7%, respectively, whereas Hong Kong’s Hang Seng closed the session flat, up by 0.1%. The markets in the UK, Germany and France, however, were trading higher by 0.2% to 0.6%.
Back home, investors have turned cautious after domestic bond yields began to rise – the 10-year bond yields have moved up from recent low of 5.76% to 6.13%.
Shrikant Chouhan, executive vice president, equity technical research, Kotak Securities, said: “On Friday, the domestic reason for the sharpest drop was the sudden jump in the 10-year government bond yields from 6.02% to 6.13%. Otherwise, the fall in the dollar index from 101 to 90.25 and cooling off in crude prices from 64 to 62.50 were positive surprises.”
The broader markets also fell, with the Nifty Midcap100 declining by 1.62% and the Nifty Smallcap100 shedding 0.9%. The markets were dragged the most by selling in financials, auto and metal stocks. The Nifty Bank hit its lowest level in 10 trading sessions and closed lower by 2.04%. The biggest contributors to the fall in the banking index were ICICI Bank, HDFC Bank and State Bank of India.
Despite the correction seen in banking stocks this week, foreign brokerages continue to adopt a pro-cyclical stance because of strong third quarter earnings. Jefferies said, “Financials, autos, metals, pharma were among sectors reporting more than 30% earnings growth. We upgraded earnings for 71% of our covered stocks, nearly half of them by more than 10%. We maintain our pro-cyclical stance for model portfolio.”
The biggest losers on the Nifty were ONGC, Tata Steel, Hero MotoCorp, State Bank of India and Tata Motors with losses of 5%, 4%, 3.75%, 3.52% and 3.5%. Major gainers were UPL, Dr Reddy’s Laboratories, IndusInd Bank, Hindustan Unilever and GAIL, up by 2.56%, 2.36%, 2.27%, 1.78%, and 1.43%, respectively.
Foreign portfolio investors (FPIs) have remained buyers this week. According to the provisional data on the exchanges, they bought stocks worth $15.8 million on Friday. So far in February, they have bought stocks worth $3.6 billion.