Equity benchmark Sensex crashed nearly 700 points on Friday, led by losses in banking stocks, as investor sentiment remained jittery amid concerns over the COVID-19 pandemic and its economic impact. After hitting a low of 27,500.79 during the day, the 30-share BSE barometer ended 674.36 points, or 2.39 per cent, lower at 27,590.95. Similarly, the broader Nifty 50 too settled below the 8,100-mark at 8,083.80, down 170 points or 2.06 per cent. As many as 21 stocks out of 30 Sensex stocks settled in the red. Axis Bank was the top loser in the Sensex pack, falling over 9 per cent, followed by IndusInd Bank, ICICI Bank, Titan, SBI, Maruti, HDFC and Asian Paints, among others. The major gainers included Sun Pharma, ITC, ONGC, M&M and Tech Mahindra, among others.
"We believe the market trend will continue to remain challenging until the fresh cases start to decline. Though the defensive pack is playing saviour, the damage in other sectors is more severe and that would keep the markets under pressure ahead also. In short, traders should continue with short bets while keeping the focus on risk management," Ajit Mishra, VP Research, Religare Broking, said. The banking stocks cracked after Moody's Investors Service changed the outlook for the Indian banking system to negative from stable, expecting deterioration in banks' asset quality due to disruption in economic activity from the coronavirus outbreak.
"Higher intrinsic value compared to the prices at which assets are available may act as a spur for discerning investors. The developments in the US, the events around oil prices and gold, and also the additional domestic fiscal measures would be the key factors which the markets would be watching as we move on to the next week," said Joseph Thomas, Head of Research, Emkay Wealth Management.
With negative closing on Friday, the Indian stock market fell for seven consecutive weeks for the first time since June 2008. Both Sensex and Nifty have cracked 33 per cent each in the last seven weeks. The markets will remain shut on Monday on account of Mahavir Jayanti and will reopen on Tuesday.
"Despite day to day volatility, the Nifty has witnessed a parabolic sharp downside if we look at the weekly charts. Presently, the weekly charts are deeply oversold and despite the tentative trade setup, a technical pull back can be positively expected. If the immediate intraday low is held, the chances of a technical pullback would increase even if there is no confirmation of any temporary base in place," said Milan Vaishnav CMT MSTA, Technical Analyst, Gemstone Equity Research.
"The recent sell-off caused significant price damage in a very short period of time and hence the market is likely to oscillate in a broad range of 1000 points. Markets are likely to witness a period of correction going ahead with a mild positive to sideways movement for a week or two. We suggest traders go long if Nifty50 sustains above 8000 levels keeping that level as stop loss for long positions," said Jimeet Modi, Founder & CEO, SAMCO Securities.