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As the transition of corona across the country explodes, the Indian stock market crashed by 880 points…!!!

Dear Trader…

India struggles to cope with the increased the cases as reported 275,306 corona virus disease on Monday, the highest single-day spike so far since the pandemic broke out, World meter showed. However, this correction can be construed as a healthy one ignited by fears of a second wave of COVID-19 just when investors expected a resilient recovery in our economy, markets began to falter and showed hiccups due to vaccine issues and rising cases. Nevertheless, it is expected that once the vaccination drive starts in full-swing, things should come back in control.

Nifty futures opened at 14399.00 points against the previous close of 14645.70, opening at a low of 14213.00 points. Nifty Future closed with an average movement of 195.85 points and a decline of around 261.70 points and around 14384.00 points..!!!

On the NSE, the Midcap 100 Index decline 2.12% and the Small Cap 100 Index decline 2.40%. As far as various sectoral indices are concerned, only pharma stocks were seen on the NSE, while all other sectoral indices closed lower.

At the beginning of intra-day trading, June Gold opened at Rs.47353, fell from a high of Rs.47850 points to a low of Rs. 47344, with a rise of 428 points, a trend of around Rs.47781 and May Silver opened at Rs.68456, fell from a high of Rs. 69380 points to a low of Rs.68104, with a rise of 523 points, a trend of around Rs.69207..!!

There will be cautiousness as a private report stated that leading brokerages have downgraded India’s GDP growth projections for the current fiscal year to as low as 10 per cent on local lockdowns threatening fragile recovery, with the resurgence of COVID-19 cases posing risks to economic recovery. Also, foreign portfolio investors (FPIs) have pulled out a net Rs 4,615 crore from Indian markets in April so far amid sharp escalation in COVID-19 cases and the consequent restrictions imposed by various states, unnerving overseas investors.

However, some support may come later in the day with Chief Economic Adviser K V Subramanian’s statement that the Indian economy is in better shape to address the challenge of the second wave of Covid-19 pandemic compared to last year as vaccines have been developed and vaccination drives are taking place.

With major Indian cities undergoing lockdowns, markets may continue to remain unstable at least till the uncertainty on the rising cases front subsides. Market participants must not read much into India Inc.’s numbers and should give utmost importance to the management commentary in order to gauge future growth prospects amidst the second wave. Further, any correction may turn out to be a blessing in disguise for the ones who felt left out in the past rally. We advise market participants to keep their shopping cart ready to go in for resilient stocks from the pharma, IT, FMCG sectors in a phased manner.

Technically, the important key resistances are placed at 14404 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 14434 – 14474 levels. Immediate support is placed at 14272 – 14202 levels.

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