Mapping the market: Small stories behind 569-point swing in Sensex

NEW DELHI: The domestic equity market continued to gyrate through the day, swinging 569 points between gains and losses amid extreme selling pressure following which buying emerged at lower levels.

Here we chart the market to comprehend the day's events better:

1) Smallcaps plunge

The broader market index, the BSE smallcap index, plunged as much as 4 per cent in intraday trade, as heavy selling by domestic institutional investors led to a sudden plunge. The index went from 0.6 per cent higher to nosedive 2 per cent into the red zone within half-an-hour of trade before extending the losses to about 4 per cent.

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“A huge amount of money was locked into midcap and smallcap stocks, which have no merits at all. That is where the pain is going be felt as we go forward,” Ajay Srivastava, CEO, Dimensions Consulting, said in an interview with ET Now.


2) Benchmarks wobbly

The largecap indices have been very volatile. The Nifty50 surged above 7,550 in early trade only to plunge to its fresh 52-week low of 7,425.80 before surging back above 7,550. The riskoff sentiment displayed by investors has been a continuing theme since the beginning of the year, but after going into the oversold territory, it seems the index is seeing some bounceback. “As I see it, the market will probably take support at lower levels and may see some small bounce. The bounces remain a distinct possibility because the market is equally oversold, and in this kind of oversold markets, technically, you get all the more chances to have a bounceback,” said Deven Choksey, KRChoksey Investment Managers.



3) RIL is the 'supporting shoulder'

The Mukesh Ambani-led Reliance Industries has been something of a shoulder to cry upon for the market as the stock has taken upon itself to save the equity market. It surged 3.6 per cent to hit its fresh 52-week high of Rs 1,086.75 during the day. Its volumes were among the highest on the BSE Sensex. RIL was the top gainer on benchmark Sensex.




4) Marksans Pharma brings fear back to pharma space

The fear is back in the pharma space as Marksans Pharma became the latest company to be pulled for poor manufacturing practices. The stock plunged about 19 per cent. UK drug regulator UK MRHA pulled up the company for deficient manufacturing standards at its Goa plant. The plant failed to clear an inspection by the UK drug regulator, media reports said. The UK drug market contributes 40 per cent to the company's revenue. The BSE healthcare index was among the top sectoral losers on the BSE, down 1.11 per cent.