Indian markets in today's trade (July 19, 2021) saw some correction with Nifty cracking to below 15800 at day's low, while Sensex moved lower to 52,506.4. It is to be noted that in Friday's trade both the indices hit a fresh high of 53,290.81 on the Sensex and 15,962.25 on the Nifty.
It is to be noted that at the time of writing this copy, the correction is anyway between 0.64-0.71%.
1. Weak Global cues:
Again the concerns on inflation and Covid 19 virus continue to bother investors. Asian markets traded at one-week lows, led by Hang Seng which suffered losses to the extent of 1.55%, Japanese Nikkei 1.22%, South Korea's Kospi down by 0.91%.
US markets futures also traded down with most losses in the Dow's futures at the time of writing this copy. S&P 500 index also was dragged for the first time in 4 weeks. Also treasuries continued to inch high and with 10-year benchmark US yields came dropping to below 1.3%.
2. HDFC Bank results didn’t came on expected lines:
Analysts expected the country's leading private bank lender to post Rs. 7915 crore as profit for the june ended quarter of FY22, nonetheless even as the profit registered an 16% YoY rise it came in lower at Rs. 7730 crore, thereby a lag from the estimated figure. In today's trade both HDFC and HDFC Bank have emerged as the top loser on the Nifty.
3. Financials and IT stocks see a drag:
There has been seen profit booking in the IT pack and both the of the packs are down in trade with more of weakness lurking in the financial and banking space. Stocks dragging the financial services and banking index down are all of the Nifty Private Bank constituents barring Bandhan Bank which was up by a margin.
Also within the financial services pack, the only stocks trading in the green included PFC, Bajaj Finserv, ICICI Lombard.
Likewise, in the PSU Bank space, Indian Bank and Maharashtra Bank are the only banks trading higher.
4. Earnings season:
As many as 12 index constituents are slated to announce results this week including the likes of Reliance Industries , ACC Ltd, Asian Paints Ltd, Bajaj Finance Ltd, HCL Technologies Ltd etc., and as expected India VIX, a measure of volatility in the Indian stock market has gained by over 5% in today's trade.
Even before today's fall market experts had predicted that hitting of 16,000 points on the Nifty could be delayed.
In our view, higher crude prices, spread of delta plus variant globally and weakening INR could be a near risk for markets. However, we continue to believe that underlying strength of market remains intact and therefore any meaningful correction in the market should be taken as an opportunity to get in quality stocks. Visible improvement in key economic data including IIP, import-export business momentum and visible traction in overall economic activities in June indicate healthy corporate earnings for 1QFY22E despite second wave of COVID-19, Mr. Binod of Reliance Securities said.