Index trend and stocks in action on March 09, 2020

In the last week Nifty, for the majority part of the week, traded within the range of Monday’s high and low with a high volatility. However, as global meltdown and Yes Bank failure dented the sentiments, Nifty has witnessed a ‘Black Friday’ and traded below key support levels. For the week, Nifty ended with a net loss of 212 points or 1.90 per cent. Selling pressure was intense in the broader markets with Nifty mid-cap and small-cap indices closed with losses of 2.45 and 4.13 per cent, respectively.

On Friday, Nifty opening with a huge gap down and broke all its crucial support, though it recovered almost 160 points from the day’s low, which resulted into the formation of a bullish hammer-like pattern. But it still closed below the important support of 11,020 levels. For the week, it formed a bear candle with a lower high and a lower low, indicating extended correction after the prior week’s sharp fall.

Technically, index is trading below all important moving averages. Further, the major long-term trend indicator, 200-DMA turned down on Friday. At present, Nifty is trading more than eight per cent below 50-DMA and 5.8 per cent below 200-DMA. These pieces of evidences are signs of long-term bearishness.  Also, on weekly time scale, indication is in-line and indicating a long-term bearish picture as Nifty has slipped below 100-week MA.

Going ahead, the immediate support is at 10,600-10,630 levels. In any case, if this support zone breaks and closed below on weekly basis, then this would be the first indication that the long-term super bullish cycle has been reversed. If the correction extends, then we can expect Nifty to correct sub 10,000 levels.

Nifty already fell by almost 13 per cent from the top, we need to watch whether the correction restricts to 13 or stretches further.

Overall, we would suggest be watch of events and avoid any new buying. Stay in cash or equivalents for the time being!

Indiabulls Housing Finance: Indiabulls Housing Finance informs that Yes Bank owes them Rs 662 crore via AT-1 Bonds. The investments in AT-1 bonds of Yes Bank were made in 2017, as a part of its treasury management of over Rs 20,000 crore of cash, when the bank was worth over $10 billion in value.

SBI: State Bank of India (SBI) will be issued 245 crore shares at a price of Rs 10 per share for Rs 2,450 crore. This will be 49 per cent of the share capital of the reconstructed bank. SBI shall not reduce its holding below 26 per cent before the completion of three years from the date of infusion of the capital.

Indian Hume Pipe: The company has received a letter of acceptance for the work of Rs 492.30 crore.

Natco Pharma: Natco Pharma received one observation from USFDA for Kothur formulation facility.

SMS Pharmaceuticals: SMS Pharmaceuticals announces successful completion of USFDA inspection at its testing facility.

PTC: PTC India has recently won consulting projects worth Rs 75 crore from its long-term associate Energy Efficiency Services Limited (EESL).