Markets plunge sharply in last half an hour; PNB sees long build-up

Update:Indian markets widened their losses in the second half of the trading session with Nifty and Sensex slipping below their important psychological levels of 14,550 and 48,400, respectively. 

Among the sectoral indices, the majority of them were trading in red with Nifty Pharma leading from the front, followed by Nifty FMCG. Meanwhile, on the other hand, Nifty PSU Bank jumped over 4 per cent.   

A long build-up was seen in Nifty PSU Banks with PNB climbing 7.7 per cent with an open interest addition of 13.90 per cent. Bank of Baroda also witnessed an addition of 7.60 per cent in the open interest with a price rise of 5.44 per cent. Canara Bank has seen the addition of 1.99 per cent while SBI saw an addition of 1.55 per cent in the open interest.  

After opening the day with solid gains, the key benchmark indices witnessed profit booking at higher levels and currently, slipped into negative terrain. 

Nifty is down by 100 points from the day’s high and it was seen hovering around the 14,600 mark. Meanwhile, Sensex had slipped below 48, 600 mark. However, once again, the broader markets were seen outperforming the frontline indices with Nifty Mid-cap and Small-cap gaining 0.88 per cent and 0.53 per cent, respectively.   

Talking about the sectoral performance, the majority of indices were trading in green with Nifty PSU Bank and Nifty Metal being the top gainers. On the other hand, Nifty FMCG, Nifty Pharma, and Nifty IT were trading in the red.   

Among stock-specific action, Tata Chemicals Ltd plunged more than 7 per cent, followed by LTTS, which was down by nearly 7 per cent. Meanwhile, stocks such as ATGL, Alembic Ltd, KPIT Technologies Ltd scaled to fresh all-time highs.   

Nifty opened the session with a gap down amid the unexciting performance of BJP in the recently concluded state elections. After opening lower, it extended its fall and went onto touch the levels of 14,416. Thereafter, the index turned sideways but picked up momentum in the last leg of the trade and managed to recoup entire losses while ending the session in the green at 14,634.15.   

The price action of the day formed a bullish candle as the closing was higher than the opening level. Despite recovering almost 210 points from the day’s low, the index did not make a higher high. Moreover, the closing was very much near the prior day’s closing. The broader markets really kept the market participants in hustle & bustle mode. Action in the large-cap was pretty much subdued as only 30 stocks out of 50 from Nifty ended in the green. The gainers’ list was filled with names from the metal, auto, and FMCG sectors.   

Having said, an interesting takeaway from Monday’s session is that at the opening, Nifty had breached 20 and 100-DMA but reclaimed at the time of market closing. Going ahead, the level of 14,450-14,500 is likely to act as strong support while on the upside, the level of around 14,780 may act as a resistance level.   

Our advice to market participants would be to remain neutral on the index and keep their focus on stock-specific opportunities.