A morning walk down Dalal Street | Avoid long positions, consider positional shorts on pull back towards 11,300
Episode 1757, Oct 07, 2019, 02:16 AM
Investors have taken a pessimistic view due to continued downward revision in GDP estimate and new stress in the banking system
The Indian market closed in the red for the fifth consecutive day on October 4. The Nifty50 index slipped below its crucial swing low of 11,247 while Sensex failed to hold on to 38,000.
The final tally on D-Street -- the S&P BSE Sensex fell 433 points to 37,673 while the Nifty50 closed 139 points lower at 11,174.
Indian market snapped three weeks of winning streak and closed in the red. For the week, the S&P BSE Senses fell 2.9 percent while the Nifty50 closed 2.94 percent down for the week ended October 4.
Investors got spooked by the quantum of rate cut which fell below market expectations as well as cut in GDP growth rate. Investors have taken a pessimistic view due to continued downward revision in GDP estimate and new stress in the banking system.
The Reserve Bank of India (RBI) revised real GDP growth for 2019-20 downwards from 6.9 percent in the August policy to 6.1 percent.
More than 300 stocks hit a fresh 52-week low on the BSE which include names like BASF India, Grasim Industries, Cummins India, Tata Sponge Iron, TCI Industries etc. among others.
In the broader market space, the S&P BSE Midcap index, and 3.9 percent plunge recorded in the S&P BSE Smallcap index.
In the smallcap space, as many as 138 stocks fell 10-30 percent which include names like Praj Industries, DCB Bank, Eros International, JustDial, Dish TV India, JM Financial, Rolta India, IDFC Ltd, Unitech, Delta Corp, Dewan Housing, and Indiabulls Ventures.
On the macro front, the foreign exchange reserves touched a record high of $434.6 billion as on October 1. According to the latest weekly data, the reserves surged by massive $5.022 billion to $433.594 billion for the week to September 27.
The Indian Rupee on October 4 closed almost flat at 70.88 against the US dollar after the RBI in a widely expected move cut key interest rates by 0.25 percentage point.
On the institutional front, FPIs were net sellers in Indian markets for Rs 682 crore while the DIIs were net buyers to the tune of Rs 606 crore, provisional data showed.