Dalal Street Corner: BSE-listed companies see erosion of Rs 5.5 lakh cr in market cap; what should investors do on Tuesday?

Market capitalization of BSE-listed companies eroded by during Monday’s trading session eroded by over Rs 5.5 lakh crore to Rs 2,41,10,831.04 crore from Rs 2,46,79,421.38 crore registered on 7 March, 2022. Indian markets on Monday closed in the red for the fourth time in a row. The benchmark indices BSE Sensex and Nifty50 were off the intraday lows and settled down 15 per cent from the record highs of October 2021.

The markets were today dragged by auto, realty, banking, and financial stocks. 

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Nifty Bank is now down more than 20 per cent from record high on Monday. Financials remained a major drag today with IndusInd Bank and Axis Bank among the top losers. On the contrary, ONGC surges to a 4-year high, tracking a big move in crude oil. 

Similarly, Hindalco, Coal India, Bharti, HCL, UPL gain in a weak trading session, while JK Cement become the top midcap loser after announcement of entering paint segment. 

The market breadth improved from opening levels with bias towards the declines. The advance-decline ratio improved to 1:5 from opening level of 1:8. In terms of Currency, Rupee slipped to a record low against the US dollar, trades near 77/$ on Monday. 

Oil prices increased by more than 6%, reaching their highest level since 2008, as the US and its European allies consider imposing a Russian oil import ban, while delays in the prospective return of Iranian petroleum to global markets exacerbated supply concerns. 

We have collated views from different experts as to what investors should do when trading resumes: 

Expert: Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers

Indian markets opened in red tracking global cues as investors continue to monitor Ukraine crisis and fear of rising oil prices hitting economy harder weighed on already fragile sentiments. Foreign institutional investors continued their selling spree in Indian markets as they offloaded shares worth as much as Rs 17,537 crore from the Indian markets in just three trading sessions of March.” 

Expert: Chandan Taparia Vice President | Analyst-Derivatives Motilal Oswal Financial Services Limited 

Nifty index closed negative with losses of more than 350 points but formed a Doji candle on daily scale which indicates some support-based buying from lower zones. It has been making lower highs - lower lows from last three sessions and resistances are gradually shifting lower.  

Now till it remains below 16161 zones, weakness could be seen towards 15700 and 15600 zones while hurdle exists at 16161 and 16350 zones. 

Expert: Vinod Nair, Head of Research at Geojit Financial Services. 

Oil prices surged above $130 a barrel for the 1st time since July 2008, following the risk of a U.S. and European ban on Russia’s oil export which accounts for about 10 per cent of global supply.  

As a result, the domestic market along with its global peers witnessed a huge sell-off from opening hours. Inflationary pressure is also witnessed in other commodities like gold, aluminium, copper, etc which will eventually eat away corporate profits in the coming quarters. 

Expert: Sachin Gupta AVP, Research Choice Broking 

Technically, the nifty index has formed a Doji candlestick on the daily time frame that suggests indecisiveness among the trades. However, the index has closed below the Lower Bollinger Band formation and psychological levels of 16000.  

An indicator RSI & Stochastic is trading near the oversold territory. At present, Nifty has immediate support around 15700 levels while on upside the resistance comes around 16000 levels. On the other hand, Bank nifty has support at 32100 levels while resistance at 34000 levels. 

Expert: Mohit Nigam, Head - PMS, Hem Securities 

Local equities markets have succumbed to selling pressure and are currently down over 2%, dragging the Sensex and Nifty below critical levels of 53,000 and 15,900, respectively. During the continuous market turmoil, inflation fears prompted a rush for safe-haven assets, pushing the global gold price to $2,000 per ounce today. 

On the technical front, immediate support and resistance in Nifty 50 are 15700 and 16200 respectively. Bank Nifty immediate support and resistance are 32400 and 35000 respectively. 

Expert: Anuj Gaur, Director of IBBM (Money maker India Securities)

For traders it is good opportunity to take advantage of high VIX in the market, on the other side, for long term investors, All defence sector stocks, Steel Stocks, IT stocks and FMCG stocks will be a good bet for long term once war situation resume and become normal, these industries will react positively faster than other industries.

Expert: Parth Nyati, Founder, Tradingo

Investors should focus on the domestic economy facing sectors like capital goods, infrastructure, real estate, banking, etc.

IT sector may continue to do well where ongoing correction is an opportunity to add some quality stocks. The auto sector is also providing favorable risk-reward opportunities after a period of underperformance.

Our top picks in this correction are Thermax, KNR Construction, LT, SBI, ICICI Bank, Infosys, KPIT, Tata Power, Tata Motors, Minda Industries, SBI Life insurance, Bajaj Finserv, Canfin homes, Sobha, Brigade Enterprises, Kajaria Ceramics, and Reliance.