Daily Markets - Feb 26, 2021 - Mr. Deepak Jasani, Head of Retail Research, HDFC Securities
(Time Zone: Arizona, USA)
Indian benchmark equity indices declined the most since May last year as a sell-off in bond markets across the globe sparked a collapse in global equities. The Nifty opened gap down and kept falling through the day and closed almost at the intra day low. At close, the NSE Nifty 50 index shed 568 points to end 3.8% lower at 14,529. For the week, the Nifty closed 3.02% lower, falling for the second consecutive week.
All 50 constituents on the Nifty index ended with losses in today's session. All sectoral indices ended lower with the Nifty Bank index emerging as the top sectoral laggard followed by Auto, Metals, Media and IT. The Nifty Midcap index fell 1.6% while the Smallcap index ended with losses of 1.2%. The India Volatility Index ended 22.9% higher at 28.14, highest since July 2020. Volumes on the NSE were the highest in three months.
Global stocks fell on Friday, with Asian shares down by the most in nine months, as a fall in global bond markets sent yields flying and alarmed investors amid fears the heavy losses suffered could trigger distressed selling in other assets. Yields on the US 10-year Treasury note eased back to 1.494% from a one-year high of 1.614%, but were still up a startling 40 basis points for the month in the biggest move since 2016.
Nifty opened with a downgap and hence has formed a bearish evening star formation on daily charts on Feb 26 as was expected by us on Feb 25. In the process, near term support of 14635 has been breached. Now the Nifty could head towards 14281-14336 band over the next few days with some intermittent bounces. Advance decline ratio keeps tracking the Nifty suggesting that the investors are taking action on the broader stocks based on the Nifty moves.