Weekly Action
Nifty, -12.2%; Sensex, -12.3%; Nifty Midcap, -13.5%; Nifty Smallcap, -17.9%; Model Portfolio, 0%.
Market Pulse “Downtrend”
Weekly Market Review
Nifty snapped its four-day losing streak to close in positive today. However, it lost over 12% during the week, and at a three-year low. Nifty Midcap (-13.5%) and Smallcap (-17.9%) declined with the market. Financial stocks were the most impacted as the index lost as much as 20% during the week.
Today, the market opened on a flat note and rose higher as investors tried to bottom fish the stocks. Nifty made an intraday high of 8,883 by rising as much as 700 points from the day’s low. With today’s action, Nifty halted four days of decline.
It is important to understand that the market selloff has been so sharp and deep that there is a reasonable possibility that we have a sharp bounce like that of today. One should not get deceived by these moves. Instead, wait for the market to show some strength. Sharp, V-shaped recoveries are generally not constructive because most stocks can be hampered by overhead supply issues and that can cause a repulse. We will continue to monitor quality ideas with rising relative strength lines and superior fundamentals that could be set up to buy when and if the market begins to stabilize.
Key News
Coronavirus outbreak update: In India, virus infected cases rose to 206 and death toll increased to five. Worldwide, cases increased to over 200k and deaths around 10k. Italy (3,405) took over China (3,245) in terms of number of deaths.
Apollo Tyres (Nse) (+3.1%) Management took a voluntary pay cut due to the ongoing coronavirus outbreak. MD and Vice CMD took a pay cut of 25%, while senior management has taken 15% cut.
Fitch Ratings has cut India’s FY21 growth forecast to 5.1% due to the coronavirus outbreak.
Yes Bank RBI appointed R Gandhi and Ananth Narayan as additional directors to the board of Yes Bank.
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