Daily Markets - Dec 21, 2020 - Mr. Deepak Jasani, Head of Retail Research, HDFC Securities

India's equity benchmark indices fell the hardest in seven months on Dec 21 as resurgent fears over a new strain of Covid-19 virus found in the UK spread panic across the globe. Basket selling by FPIs likely triggered the sharp fall in Indian markets. At close the Nifty was down 432.10 points or 3.14% at 13328.40. Indian markets performed the worst among the Asia pack. Marketcap of BSE listed companies fell Rs.6.64 lakh crores or 3.6% between Dec 18 and Dec 21.

Volumes on the NSE were the highest since Nov 27. All sectoral indices ended in the negative with PSU Bank, Media, Metals realty, Auto, Banks and Pharma indices being loss leaders. Broad market indices line Midcap and Smallcap fell more than the Nifty.

Asian stocks ended mostly lower on Monday after a new strain of Sars-CoV-2 virus has been found in the U.K. that is 70 percent more infectious. Wavering trade negotiations between Britain and the European Union and rising U.S.-China tensions overshadowed positive news of U.S. lawmakers reaching a deal for a nearly $900 billion Covid-19 financial package to help struggling households and businesses.

Nifty has formed a large bearish candle which has engulfed the high low range of the previous 9 sessions. In the process two upgaps formed in this period have been filled nullifying the bullishness. The advance decline ratio on the NSE on Dec 21 was the worst since March 23, 2020 when the Covid fears were at the peak. This suggests across the board panic selling/profit booking.

A large fall on a Monday does not augur well for the week. A breach of 13209 on the Nifty could result in another 200-250 point fall.

Source : Equity Bulls

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