It’s A ‘Sell-On-Rise’ Market After Nifty’s Five-Day Fall
Indian shares declined the most in over a month on Monday, led by banks on concerns around higher provisioning and oil marketing companies dropped with the commodity set for its biggest June decline since 1998.
Investors also took some profit off the table ahead of the nationwide goods-and-services tax beginning July 1. “Today’s correction is nothing out of the ordinary,” independent market expert Anand Tandon said adding, “…somebody waiting [to invest], I think a little more patience will not harm them.”
The S&P BSE Sensex fell little over 0.5 percent to 30,962 – its lowest level since May 29 of this year. The NSE Nifty closed 0.7 percent lower at 9,510, extending its losing streak to a fifth straight session. This after the 51-share index fell as much as 1 percent intraday to 9,473 – its lowest since May 25, 2017.
The market breadth was firmly tilted in favour of the bears. About 1,189 stocks declined and only 303 advanced on the NSE.
Vijay Singhania, founder-director at Trade Smart Online said the strategy to adopt would be “sell-on-rise” in the short-term. He expects the bias to remain on the downside more so because of the GST rollout.
Singhania advised investors to get on to a systematic withdrawal plan. “It is clearly a sell on rise kind of a market,” he said.
He said the upcoming monthly derivatives expiry will be a key event for the market now. “As things stand, the index is likely to close near the 9,440 level on Thursday, however, a close below 9,410 would mean another 200-point downside at least,” he said.
Gaurav Ratnaparkhi, senior technical analyst at Sharekhan said the Nifty seems to be headed for its next support level of 9,260. “I think investors should cover their long positions and look for shorting opportunities. Also, it would be a good idea to stick with the largecap stocks,” he told BloombergQuint by phone.
Movers And Shakers
Bank of Baroda (-3.7 percent) and State Bank of India (-3.2 percent) led declines among lenders after credit ratings company Crisil Ltd. said the central bank may increase provisioning on the top 50 non-performing loans by an extra 25 percent in the current fiscal year.
Government-owned banks will be most vulnerable to incremental provisioning requirements, JPMorgan said in a note to clients. The new measures could also increase credit costs for banks, according to Morgan Stanley. (To know more, click here)
Meanwhile, debt-ridden Jaiprakash group stocks rallied anywhere between 20 percent and 12 percent after its lenders said to have given an in-principle approval to a debt restructuring plan.