Political Uncertainty Shocks Market, Nifty Ends Below 200-DMA

The Indian markets hit a fresh 4-month low on political uncertainty and the buzz of ETF funds liquidating their portfolios. Investors and traders are liquidating their long positions on reports of early elections freshly sparked off by Bharatiya Janata Party (BJP) veteran, LK Advani’s statements. At the end of the day, the Nifty was down by 98 points at 5574 and Sensex lost as much as 294 points to close at 18,507. Both the indices closed down in the range of 1.56%-1.73%.

The advance-decline ratio ended on the negative side at the end of the day. On the NSE, 1116 shares closed in the red and 305 shares were in the green.

Top 5 NSE Gainers: Coal India ended up by 3% on the NSE, followed by Dr Reddy’s Labs, Hindustan Unilever, Maruti Suzuki India and Mahindra & Mahindra.

Top 5 NSE Losers: Jaiprakash Associates was down by 6.45%. UltraTech Cement, Jindal Steel & Power, HCL Tech and Reliance Infrastructure were the others in the list.

All the sectoral indices ended in the red. Realty, IT and Bankex were the top losers in the pack.

In the Asian markets, the Nikkei recovered smartly from the lower levels to close up by 2.16% at 12,634. Taiwan Weighted was also in positives. On the negative side, KOSPI ended lower by 1.21%, followed by Straits Times and Hang Seng.

The European markets are trading on a mixed note so far. The CAC 40 is witnessing gains of 0.74%, DAX is higher by 0.37% and FTSE 100 is lower by 0.13%.

Buzzers: Coal India surged as much as 3% even in a negative market on reports that the government is planning to raise Rs 200 billion by selling a part of its stake in the company.

Bajaj Auto fell about 1% in today’s trading session. The stock opened at Rs 1685 and registered a low of Rs 1656. It has underperformed over the past one month, dropping more than 16%.

As we had mentioned, the Nifty had a strong support at 5610. It breached this, and snapped further by almost 50 points from there.