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    Kya lagta hai? This is how D-St analysts see the stocks selloff

    Synopsis

    RIL, which has gained nearly 6% so far this month following two mega investments in its retail unit, fell over 2% on Thursday.

    Stock-market-4---ReutersReuters
    There were fears that the government might consider bringing in fresh restrictions, which may hurt businesses.
    Domestic stocks fell for a sixth straight session on Thursday, with the Sensex tanking nearly 3 per cent to 36,553, dragged by RIL, banks and TCS amid fears of fresh pandemic restrictions and jittery over a global selloff in stocks. Nifty fell 326 points to 10,805. There were fears that the government might consider bringing in fresh restrictions, which may hurt businesses.

    RIL, which has gained nearly 6% so far this month following two mega investments in its retail unit, fell over 2% on Thursday. TCS fell 5.5% after the largest minority shareholder in Tata Group said on Tuesday it wanted to separate interests from the autos-to-steel conglomerate.

    Here is how analysts read the market behaviour:
    Samir Arora, Helios Capital
    in general the normal peaking at least in the short term happens when IPOs get oversubscribed 100 times and they open 100% higher. If you see, the same thing happened in the US with Snowflake opening more than 100% higher after raising the price by nearly 50%. Similarly things are happening in India. But I would say this is a global thing and we would not be able to say exactly whether this is the high or not for the year. But I still do not feel so bad. Stocks that had to do badly are still doing badly.

    Shrikant Chouhan, Kotak Securities
    On the day of the monthly and quarterly end, we saw a fatal decline in the market. It is a technical sell-off that has broken all important levels, however, the Nifty is currently closed between the 200-day SMA and the 200-day EMA support, which are at 10839 and 10761, respectively. The market breadth is extremely weak and extremely oversold. The Nifty has witnessed thrice a time such type of weakness in the last five days.

    Usually such type of formation represents extremity of Fear in the market, which is good for confident buy cautious investors. On a weekly basis, the Nifty fallen to 23.60 percent Fibonacci retracement level that acts as major support if the previous rally is beyond expectations. In the past, we recorded such type of formation at the end of January 2020 and later on we saw massive bounce back on the upside. Technically, we should be buyers in the market with a final stop loss at 10,700 because short-term markets are sold more deeply. Depending on the close, below 10,700 level, Nifty could fall to 10,500 or 10,400 level. With a medium term view (one or two weeks), there should be a strategy to buy selectively.

    Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi
    The selloff was due to multiple negative macro factors, ranging from increase in tensions in Korean peninsula, rising covid cases and impending worry over second wave and stimulus concerns in US over uncertain recovery. The selling was not only limited to major indices, but broader indices and midcap and smallcap stocks as well. Sentiments also got a hit after the DPIIT in its latest data showed that FDI equity inflows into India contracted by 60% to $6.56 billion (Rs 49,820 crore) in first quarter of current financial year (Q1FY21).

    Nischal Maheshwari, CEO, Institutional Equities, Centrum Broking
    In the last 10 years or 15 years, we have always seen that September and October are very volatile months and especially in September, we have seen good selloffs happening across the world. This time it is no different. The other thing I would want to add is that US elections are being held in November and usually near elections, the volatility goes up dramatically.

    Vinod Nair, Head of Research at Geojit Financial Services
    The market tracked weak global cues as the uncertainty witnessed in the last few days gave way to negativity, with broader markets also underperforming. The uncertainty regarding an economic recovery, the unabated rise in virus infections, and today being derivatives expiry day, all contributed to the negativity. With volatility expected to be high, traders are advised to remain cautious.

    Manish Hathiramani, Deen Dayal Investments
    Nifty's support level of 10,900-10,950 was ignored during today's session. We have also pierced the support at 10,882 level, which was made on August 3, 2020. This opens a new target of 10,750. Any bounce can be utilised to short Nifty for this target.

    S Ranganathan, Head of Research at LKP Securities
    Weak global cues coupled with worrying data points from the US led to a gap down start today even as the re-emergence of the virus rattled the Euro Zone. Indices here saw deep cuts led by TCS & Infosys as both along with RIL were the ones which led the recovery in the last five months. The broader markets were pounded today much beyond the 3% cut witnessed in the indices.

    Alok Singh, Head of Investment, BOI AXA
    After a wonderful run, the market has been seeing a consolidation phase for the last two weeks and that is what may have frustrated many of the traders, because running a position is a cost, but not for a long-only fund like us. So I am not too worried. It has been corrected from the top and if that is anywhere between 5% and 10%, it is an okay correction.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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