Stock Market: Friday bloodbath event-based; indices riding uptrend

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By S Jha

New Delhi, May 5: The Friday gloom of the day on the back of bloodbath on the Dalal Street may have given way to relief with strong green number in the American bourses in the afternoon session on Dow Jones. The Indian indices were top heavy, with load of having run away too fast wearing down the market. But the direction of the market trend appears to have clarity that the uptrend is still there to play for.

HDFC Bank’s merger with sister entities has been overhanging the street for a long time now. The anticipation was that the merger will bring rejig in the MSCI index, which could have brought $3 billion of inflows. But the news turned out to be super negative. In place of an inflow, there would actually be an outflow, and the heavyweight of Nifty and bank Nifty were hammered on Friday.

HDFC Bank tanked by close to six per cent. HDFC also sank by close to six per cent. Together they accounted for a loss of market valuation of over Rs 64,000 crores. This was once in a blue moon moment for the HDFC twins, as they lose so heavily very rarely, but they went down under the table not because of their fault but for the MSCI negative news.

Nifty tanked by over 180 points and Bank Nifty shed more than 900 points. Nifty had raced past 18200 level too fast, and chartists had been claiming that the index is heavy at the top, meaning that the time could be ripe for retracement. Some of the chartists are also claiming that Nifty could break the 18000 level also.

But Dow Jones was trending up on the back of the US market adding strong new employees. The resilience of the US economy by creating much more than the expected jobs positively surprised. Also, Apple delivered better quarterly result. Previously, Meta had led the rally with stellar result. Thus, the Indian indices could very well be reacting to the gains in the US indices.

Foreign institutional investors, which had been pouring cash in the equity markets, were once more net buyer with over Rs 700 crore contribution. But their domestic counterparts sold heavily.

Happiest Minds, one of the most hammered IT scrip, was strong on Friday. Railway stocks remained hot for another day. Mirza International was locked in the upper circuit. There were several smallcap and midcap scrips which are attracting value buyers from their low levels, suggesting that the market participants are confident of the direction of the market.