Index majors should be the focus of the investors. Traders should keep their leveraged positions hedged
Trading session at the Indian stock market on Thursday was a pure mix of greed and fear. In the morning session, the market saw greed gripping the investors’ mindsets, taking the benchmark indices to record high levels. In the afternoon session, greed was replaced by fear as the news of a major fire breaking out in the Pune-based Serum Institute of India (SII), the Indian manufacturer of COVID-19 vaccine Covishiled, spread.
Market participants believed investors feared the fire incident may disrupt the nation-wide vaccination drive and may endanger economic recovery.
This resulted in heavy selling in the afternoon session. The Sensex erased all gains and retreated below the 50,000 level crossed in morning trades. Sensex ended at 49,625 levels. It was down 167 points or 0.34 per cent. At the National Stock Exchange, the Nifty50 index settled at 14,590 levels, down 54 points or 0.37 per cent.
During the session, Sensex touched its intra-day low of 49,399, falling 785 points from its intra-day high. However, it staged a smart recovery to close the day at 49,625.
ONGC, Bharti Airtel, State Bank of India (SBI) and IndusInd Bank were the top laggards on the index, down between 2 per cent and 4 per cent. Weightage-wise, profit-booking in HDFC, Airtel, TCS, ITC, and SBI dragged the index lower.
All the key sectoral indices ended the day in a sea of red. Nifty PSU Bank index declined 3 per cent, followed by cuts in Nifty Realty index (down 2.3 per cent) and Nifty Metal index (down 2 per cent).
Ajit Mishra, VP – Research at Religare Broking said that the benchmark opened on the back of strong global cues and remained range-bound. After that, however, profit-taking in the latter half dragged the index lower. Among the sectoral indices, a sharp decline was witnessed in metals, pharma, PSU Banks and IT stocks. The broader indices too remained under pressure and lost in the range of 0.7-0.8 per cent.
“We feel intermediate corrections are healthy for markets and participants should continue with “buy on dips” until we see some reversal signal”, he said.
In the present scenario, index majors should be the focus of the investors. With more companies to declare their third-quarter results, traders have no option but to keep their leveraged positions hedged. Apart from the domestic factors, global cues will also remain on participants’ radar.