Index trend and stocks in action on March 13, 2020

Nifty had a bloodshed session on Thursday as it suffered the largest ever loss in the history in absolute terms. It ended the day with a sharp loss of 868 points at 9,590.

The price action formed a long bear candle with a sharp opening downside gap. Nifty has roughly lost about 23 per cent from its lifetime high in just 37 trading sessions. The index has breached its crucial support level of 9,950-10,000 decisively. It has now retraced 50 per cent of rally witnessed from March 2016 to January 2020.  Going ahead, the 61.8 per cent retracement of the last four-year rally is placed at 8,966. We can assume that this could be a meaningful area of support.

The leading indicator recorded a historic low and it can remain in oversold conditions for some time. An indicator reaching to an extreme oversold condition does not mean that the index will bounce back.

With a sharp correction in quick time, many of the stocks are looking extremely attractive in the terms of relative valuation and very often, the market participants commit mistakes by trying to catch the bottom while, we believe that catching the bottom is next to impossible but we try and be close to it. However, as of now, we do not see any such sign or evidence of bottom formation.

SBI: Executive Committee of Central Board (ECCB) at its meeting held on March 11, 2020 accorded an approval for the purchase of 725 crore shares in Yes Bank Ltd at a price of Rs 10 per share, subject to all regulatory approvals. SBI informed that their shareholding in Yes Bank Ltd will remain within 49 per cent of the paid-up capital of Yes Bank.

Wipro: Wipro was cited as a leader and star performer in Everest Group’s PEAK Matrix® Assessment 2020.

AstraZeneca Pharma India: AstraZeneca Pharma received an import and market permission from Drugs Controller General of India (DCGI) for Calquence drug, used for the treatment of leukaemia.

Sun Pharma: Sun Pharma to consider share buyback on March 17.