Stock Market: All roads go downhill; Europe unleashes bears on bourses

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By S Jha

New Delhi, March 24: Nifty on Friday finally decisively broke the 17000 level to close at 16945, with a deep cut of 131 points. In one month, Nifty has lost over two and a half points or 447 points. The sub-story of Nifty is that the index is sliding down with sideways movements. The base is shifting lower.

The Finance Bill proposal to hike taxes on futures trade also sent the indices on the downhill. Option sale tax has been hiked by 24 per cent. Tax on sale of futures has also bene biked by 25 per cent.

European financial institutions appear to be in a tailspin. After Credit Suisse Bank, Deutsche Bank has gone into the grips of the claws of bears. Europe is largely in a state of recession. After decades of near zero interest rates, the high interest regime in Europe is driving the banking institutions to deep stress.

With the US and the European financial institutions cracking under the high interest regimes, the spillover effect is being speculated to stagger to different continents. Germany, the UK and France are battling the worst of recession. Private consumption is reported to have taken severe beating in these countries.

True to the character of a bear market, there is hardly any scrip in the Indian equity markets which have been able to sustain momentum for another day. After two days of sharp bounce, Reliance Industries is back to the square one, to the level where it was three days ago. Similar is the case of Bajaj Twins. Bajaj Finance and Bajaj Financial Services had bounced from the oversold positions but in two days both are back to same place from where they had rebounded.

China reopening theme is hammering the metal sector. The bellwether of metal sector is Hindalco, which is now struggling to cross Rs 400 level, as the scrip closed on Friday at Rs 388. Not long ago, when China was enforcing ‘Zero Covid Policy’, Hindalco was on fire, having crossed even Rs 600. Similar is the story of JSW Steel, Tata Steel, Vedanta and other metal scrips.

IT stocks are also trading in a narrow zone, picking up in the early sessions on some days to give up and slump in the latter parts of the days. Banks have been hit hard the most in the equity downturn. Bank Nifty has now come close to the level of 39000 and any breakdown from this position could again embolden the bears.