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Market takes a bearish turn on expiry day

THE ASIAN AGE. | ASHWIN J PUNNEN
Published : Apr 26, 2019, 6:37 am IST
Updated : Apr 26, 2019, 6:37 am IST

The Market breadth, indicating the overall strength of the market, was weak.

On the BSE out of total shares traded 2841, shares advanced were 1200 while 1465 shares declined and 176 were unchanged.
 On the BSE out of total shares traded 2841, shares advanced were 1200 while 1465 shares declined and 176 were unchanged.

The market faced major sell off on the day of F&O April contract expiry amid huge volatility on Thursday. The Sensex plunged 323 points, or 0.83 per cent to close at 38,730.86, while the Nifty closed 84 points lower at 11,641. Selling was seen in sectors like banking, FMCG and metals.

Major Index losers were Bharti Infratel, Tata Steel, Vedanta, Maruti Suzuki and Hindalco Industries, while Tata Motors, Coal India, SBI, Maruti Suzuki, Vedanta and Tata Steel were the gainers. Bharti Infratel closed 9.62 per cent lower after the telecom tower operator reported its earnings for the quarter ended March 31.

The Market breadth, indicating the overall strength of the market, was weak. On the BSE out of total shares traded 2841, shares advanced were 1200 while 1465 shares declined and 176 were unchanged.

Technical View
"A bearish piercing pattern post a reversal sends an complete outright bearish signal for traders on expiry day. The Nifty was able to clinch around 66 per cent rollover, at par with its previous month while a tad below its 6 month average. A complete grip of bears was seen on market with many indices and sectors showing negative breadth as decliners took a toll on overall gains," said Mustafa Nadeem, CEO, Epic Research.

According to analysts, as it was expiry day, volatility was much expected and the Nifty was seen inching above 11750 but was not able to sustain the same. With crude oil trading at 5 month high and dollar strengthening against INR and other worlds leading basket of currencies, it is very difficult for market to sustain above 11800 with good breadth.

And VIX is also at elevated levels and is sustaining above 20 mark. "This is also worrying since it indicates that there is a fear in market and its undertone. We will also be having some important data such as Fiscal deficit and also Infrastructure output in coming week. Though, it is the elections and its final result assumptions that is keeping investors on toes," Nadeem said.

Meanwhile, the rupee shed 0.5 per cent against the dollar in intraday trade on surging crude oil prices. Brent crude futures, the global oil benchmark for crude oil, rose 1.25 per cent to cross the $75 per barrel mark.

Market View
"After three consecutive days of decline, the bulls staged a smart comeback as the Indian benchmark indices ended with strong gains of led by supportive global cues," said Jayant Manglik, President of Retail Distribution at Religare Broking.

Manglik expect markets to remain volatile in the near term due to election uncertainty and earnings outcome. The price of crude and would be closely monitored along with currency movement, he added.

Foreign institutional investors (FIIs) purchased equities worth Rs. 974.88 crore on Wednesday, while domestic institutional investors (DIIs) sold shares to the tune of Rs. 657.06 crore, according to provisional data from the NSE.

Tags: sensex, nifty