Market Movers: IT stocks battered, pharma sees buying; 77 stocks flash ‘sell’ signal

NEW DELHI: Investors gave a thumbs down to the first set of stimulus measures announced by the government for MSMEs and NBFCs and sent the domestic equity indices crashing lower on Thursday.

A gloomy economic outlook projected by the US Fed Chair and continuous rise in coronavirus cases also hit sentiments. “A sobering warning from the World Health Organization that the coronavirus may never go away added to the depression,” said Deepak Jasani of HDFC Securities .

Bank, IT and financial services stocks took much of the battering while there was some buying in pharma and FMCG sectors.


Here we captured some of the major trends from Thursday’s session:-

Nifty IT snaps 4-day winning streak
Heavy selling in Mindtree, Tech Mahindra and Infosys, each of which fell more than 5 per cent, resulted in Nifty IT index snapping its four day rally The index tanked 3.51 per cent to 13,293. A grim economic outlook for the US means companies will be cutting down on their tech spends which, will in turn, hit top lines of Indian technology behemoths.

Pharma snaps 3-day losing streak
Pharma stocks that have been one of the bright spots in the current bear market saw some buying. Cadila Healthcare, Lupin, Glenmark Pharma and Divi’s Labs rose 1-5 per cent taking Nifty Pharma index 0.27 per cent higher to 9,172.

Insider Trade: HDFC Life, 5paisa
Mohan Radhakrishnan of 5paisa sold 12,600 shares of the company following which the stock dropped 1.90 per cent to Rs 152. Similarly, S Parthasarathy of HDFC Life sold over 55,000 shares of the company. The stock fell 4.25 per cent after the transaction.

Stocks that hit upper circuits
As many as 220 stocks hit the upper circuit limited on BSE. They included Credit Access Grameen, Au Small Finance Bank, Jubilant Life Sciences, KEI Industries, DHFL, Inox Wind, NBCC and Reliance Power.

Stocks that hit lower circuits
On the other hand, over 200 stocks slumped to lower circuit limits during the session. They included Mahindra CIE Automation, Gayatri Projects, Sadbhav Engineering, Jain Irrigation and Rail Vikas Nigam Limited, among others.

Fertiliser stocks give buy signals
Nearly 70 scrips on BSE flashed ‘buy’ signals as they crossed above the signal line on the MACD indicator, notwithstanding the fall in broader markets. They included a number of fertiliser and chemical stocks such as Rashtriya Chemicals, National Fertilisers and Gujarat Narmada Valley Fertilisers. Besides, United Spirits, Toyam Industries, Century Plyboards, Bombay Dyeing and PTC India also figured on the list.

77 stocks flash ‘sell’ signals
Some of the most notable companies gave sell signals as per the MACD indicator. They included Reliance Industries, HDFC Bank, Aurobindo Pharma, Cummins India, Muthoot Finance, Jain Irrigation, Max India, IGL and Deepak Nitrite, among others.

Where is Nifty headed?
The recent opening upside and downside gaps of the last three sessions could signal formation of another (apart from previous May 4) Bearish Island Reversal pattern as per the hourly time frame chart, with the downside pattern target of 9,045, analysts said. “Nifty is currently placed at the edge of the immediate support in the 9,100-9,050 zone and a sustainable move below this area could open further weakness in the market. The next downside level to be watched at 8,900 level. Immediate resistance is placed at 9,250 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.