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SBI, HDFC Bank, ITC drag Sensex 200 points; key factors that contributed to market’s fall

Surbhi Jain

Extending the losses in the last hour of the trading, domestic equity market benchmark Sensex and Nifty ended lower for the second straight day in a row. "Today market opened in positive and marched towards the resistance zone of 12,250 and failed to breach it. Sell off seen from high, once supreme court verdict on AGR case went against telecom companies and their creditor banks. Post verdict Bank Nifty has seen major supply and finally closed in red by losing more than 400 points. Market breadth was in favour of bears for every two gainers there were three losers. On a weekly basis, Nifty has created a ‘Doji’ whereas, on a daily basis it has seen follow up selling post ‘Black Cloud Cover’ candlestick pattern yesterday. In short, on this Valentine’s Day bears got gifts from the market," Vishal Wagh, Research Head, Bonanza Portfolio Ltd said.

Sensex, Nifty end half a per cent lower– S&P BSE Sensex ended 209 points or 0.50 per cent lower at 41,250, while the broader Nifty 50 index finished at 12,113 points, down 61 points or 0.50 per cent. Heavyweights such as HDFC Bank, ITC, SBI, IndusInd Bank and Axis Bank were among the major contributors towards today’s fall.

Top gainers and losers on S&P BSE Sensex- IndusInd Bank was the top loser with a 4.37 per cent decline, followed by Power Grid, NTPC, Hero MotoCorp and M&M. Conversely, Bharti Airtel was the top Sensex gainer with a growth of 4 per cent. HCL Tech, RIL, ICICI Bank and Tech Mahindra were among the top gainers on the index.

Nifty sectoral indices trade lower- All the nifty sectoral indices ended lower, with PSU Bank Index down 2 per cent weighed by weakness in J&K Bank, Indian Bank, UCO Bank and SBI. Nifty Bank, auto, FMCG, metal and realty were down over a per cent. In the broader markets, S&P BSE Midcap index fell 0.88 per cent to 15,647.89, while S&P BSE Smallcap index settled 0.46 per cent lower at 14,673 points.

Technical view- "A long negative candle was formed today and the Nifty seems to have faced stiff resistance around 12250 levels. We observe an emergence of strong selling pressure around 12200-250 levels, which signals a possible completion of recent upside bounce in the market. We observe a formation of doji type candle pattern as per the weekly timeframe chart, after a sharp upside bounce of last week. This could indicate an indecision among market participants at higher levels. Sometime, such doji patterns after a reasonable upmoves could signal a reversal pattern, post-confirmation. The short term trend of Nifty seems to have reversed at the key overhead resistance of 12250 levels. There is a higher possibility of further weakness in the next week. The next lower levels to be watched at 11950-11900 in the net week," Nagaraj Shetti – Technical Analyst, HDFC securities said.

Vodafone Idea tumbles 22%- Vodafone Idea shares tumbled 22.32 per cent to Rs 3.48 per cent apiece on BSE after Supreme Court AGR order on modification pleas filed by telecom companies. Vodafone Idea faces statutory dues of Rs 53,039 crore while Bharti Airtel has to pay Rs 35,586 crore. Among the telecom companies, only Mukesh Ambani's Reliance Jio has paid its AGR dues.

Wholesale inflation at 8-month high- WPI-based wholesale inflation for the month of January 2020 was recorded at 3.1 per cent, an eight-month high. It stood at 2.59 per cent for the previous month and 2.76 per cent during the corresponding month of last year.