It was another rough day for the market. It didn’t look like it would be such a rough day and there were no over reasons for the markets to fall such a lot today. But it just turned around in the second half of the session.
It started placid, absolutely flat, which was the call in the morning for most people that it would be a flat, rangebound kind of session because there were no great cues, global markets were generally shut and in any case there is no great technical overhang on the market right now.
But such are the ways of the market, surprising as always. Post 1 O’clock in the afternoon, we saw a wave of selling, which sank not only the largecaps but also the midcaps and smallcaps.
In fact that was the unkindest cut. The midcaps that had started performing for the last couple of days, stock futures positions were loaded on in some of those momentum stocks. They started the day 4-5% up while the Midcap index was up 1.5 per cent in the morning.
By the time we ended trade, the Midcap Index was down more than 2.5% and many of those popular trading stocks were down between 5-7 per cent. I imagine traders would have lost money in those midcaps, positions that have been opened up in the last 48 hours.
The largecaps weren’t spared either. It looked like it was concentrated Nifty Futures shorting happening today. The Nifty Futures discount was about 40 points and open interest had gone up indicating that fresh shorts had piled up today, perhaps from global institutional investors, because they have been shorting the Nifty since yesterday and we saw the pain in many largecap names like Reliance, ITC,ONGC, Cairn. Real estate was singled out for punishment. Unitech, HDIL, Omaxe, the whole lot was down.
Technology continues to correct since Wednesday. Satyam, Wipro, Infosys were all down. Metals saw no redemption there. SAIL and Hindalco both plunged today. It was really a tough day for largecap names.
On the midcap side, we had aside of real estate, power stocks was singled out for punishment, JP Hydro, NTPC, Neyveli Lignite, Power Finance Corporation, all those stocks were down quite significantly.
The breadth that was positive in the morning turned around quite a bit in the second half. We had just about a couple of hundred advancing stocks to more than 800 declining stocks today. And Asia wasn’t even open to follow-up on the US overnight cues. It was Europe that opened up a little weak in the afternoon, and that might have led to sentiment coming off.
This was the second day of fall in the market. In two days now, we have lost more than 1,000 points on the Sensex. The Nifty has closed below 5,200, which will not please the traders one bit. It has been a bad day, whichever way you look at it. There is no getting away from it.
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