Stock Market Crashes In 2021
Domestic stock markets fell for a fourth consecutive session on Wednesday, with S&P BSE Sensex falling over 1,000 points in afternoon trade. Here is all you would like to understand about today’s stock exchange crash.
Consecutive session as both benchmark indices shed nearly 2% at Wednesday closing. Within the afternoon session, at around 2:35 pm, S&P BSE Sensex plunged to an intraday low of 1,078 points or over 2% and NSE Nifty fell below 14,000 points.
With the Union Budget just five days away, domestic stock markets on Wednesday witnessed heavy selling pressure, sending the benchmark Sensex plunging by 938 points to 47,409.93 and therefore the NSE Nifty Index by 271 points to 13,967.50. With this, the Sensex has fallen 2,600 points after it hit the 50,000 points last week.
What led to the selling pressure?
After a weak start, the benchmark indices gradually drifted lower because the day progressed and settled around the day’s low. Besides, caution before the Union Budget and scheduled derivatives expiry also added to the selling pressure. In line with the benchmark indices, all the opposite indices, barring FMCG, ended with losses with metal, realty, and auto remaining the highest losers.
Are foreign investors selling stocks?
Foreign portfolio investors (FPIs) who invested Rs 1.70 lakh crore in the civil year 2020 have turned cautious. It’s well-known that a fall in FPIs inflows is going to be the most important risk to the liquidity-driven rally. Indian bourses mirrored mixed sentiment from global peers with a downward rally due to consecutive days of FPI selling. Barring the defensive FMCG segment, all sectors traded within the red zone with banking and pharma stocks being the worst hit.
Stay light, stay cautious: The way to trade stock markets before Budget 2021
The NSE Nifty 50 index ended 0.93% lower at 14,238 on Monday. India’s stock markets are closed today for a public holiday. The markets will resume trading on Wednesday.
“Going ahead, markets may still remain highly volatile before Union Budget 2021. The continued earning season further adds to the volatility. The Fed monetary policy is additionally due in the week which might be the primary one post newly inaugurated US President and thus would hold a lot more significance,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.
Generally, the market doesn’t give any major trend reversal before the mega event; but at this point, it’s like we are getting to witness yet one more unprecedented behavior of the market. The next few days would be quite crucial and would be interesting to ascertain whether markets correct further or it shows some resilience to guard its crucial supports,” he said.
“Nifty is placed at crucial swing low of 14222, which remained unbroken on a closing basis. However, the way charts are shaped up, the likelihood of sliding below this level is sort of high to check 14100 – 14000 levels.
Nagaraj Shetti, the technical research analyst at HDFC Securities, also remains cautious on markets. “The short-term trend of Nifty continues to be weak. A sustainable move below 14200 is predicted to tug Nifty right down to 13800 levels within the near term. Any upside towards 14360-14400 might be a sell on the rising opportunity,” he said.
For the fifth consecutive day Sensex and Nifty have closed deep in the red. Now S&P BSE Sensex sits at 46,874, down 6.5% from its all-time high of fifty, 184. Nifty 50 closed the day at 13,821. Broader markets closed red. India VIX or the volatility gauge zoomed to breach 25 levels earlier within the day only to finish with losses. Among sectoral indices, Nifty Bank, Nifty Private Bank, and Nifty Media ended with gains. Axis Bank was the highest Sensex gainer, zooming 6%, followed by depository financial institution of India, ICICI Bank, and ONGC. HUL, Maruti Suzuki India, and HDFC Bank were the highest drags.
Buy SBI Life
SBI Life has corrected from a high of 955 and recently tested the 200-day EMA. Today, it bounced back from these supports and showed relative strength against the Nifty which is in correction mode.
Technical indicators are giving positive signals because the stock trades above the 50 days and 200 days SMA. Short term momentum readings just like the 14-day RSI too have bounced back strongly which augurs well for the stock
Buy Container Corporation
Container Corporation has shown relative strength in the week. While the Nifty has corrected, Container Corp has bounced back from a coffee of 403 and gained 1.22% thus far in the week.
The 200 days EMA and 50 days SMA is currently providing support to the stock. With the medium and future technical setups looking healthy, we expect the stock to gradually move higher within the coming weeks.
Thinking to Invest in Tesla?
Shareholders of Tesla (NASDAQ: TSLA) have experienced incredible gains over the previous couple of years. One explanation for a valuation that defies logic is that it is a bubble, with a drop to return which will be as remarkable because the ride up has been. But another suggestion is that the market is so massive that the corporate will grow into the valuation.
If the latter is that the case, Tesla shares could hold their value. Further, it might imply that charging infrastructure for the world still features a huge runway. No matter how Tesla fares, the transition to electric vehicles (EVs) is unmistakable, and charging networks will grow.
Which charging company should investors consider?
There also are smaller players, but, at now, an investor would know either owns a basket of stocks or commit funds to a pacesetter within the sector. Blink Charging isn’t a pacesetter within the U.S. or Europe, isn’t yet profitable. Further, the corporate continues to issue new shares (including adding quite 15% to the share count just this month) to satisfy its capital needs. The highest line is that the bottom line.
For better or worse, companies going public through SPAC mergers offer investors unproven estimates for growth. The longer term of the EV sector remains unknown.
However, we will attempt to make valuation comparisons supported management’s estimates of future revenue using price-to-sales ratios. Below are enterprise value multiples for the businesses supported future revenue estimates provided by management.
Feel free to write us if you have any more suggestions regarding investment in stock market.