Bombay Stock Exchange
By S Jha
New Delhi, February 28: Broad-based selling in the indices revived the poll eve fear factor on the street. Nifty and Bank Nifty went into tailspins after taking off on positive notes early in the morning. The selloff in the indices came a day ahead of the monthly expiry of the option contracts.
The market participants claim that the indices have slipped into high volatility phase. The Election Commission is likely to announce the poll dates for the Lok Sabha elections anytime. The consensus view indicates the poll date announcement in the first week of the next month.
The ferocity of the selloff could be gauged from the collapse in Nifty as 46 of the 50 scrips in the index ended in the red. The sharp fall was seen in the scrips which had risen quickly to record levels. The market participants are also linking the indices collapsing a day ahead of the monthly expiry to the dynamics of the option writers.
Nifty, Bank Nifty, and Sensex had almost rallied 4.5 per cent in a month before collapsing on the face a day ahead of the monthly expiry hurdle. The market participants also claim that the indices after spurting 4.5 per cent in a month were not finding further steam to extend the gains.
The brutal selloff came in the PSU scrips which had seen phenomenal run in the last 18 months. They got a cut of almost two per cent. The likes of Coal India, Power Grid Corporation, NTPC, and others too deeper cuts after rising to record levels in the February series.
The midcap was excessively sold out in the day as most of the constituents reported deep cuts during the day. The intensity of the selloff caught the market participants unaware who were searching in the dark for the clues for the selloff. This was because TCS, Infosys, and Tata Motors had given a rousing start to the market. TCS has been in a stellar rally, as the scrip during the day had crossed the level of Rs 4150. Tata Motors had also crossed the level of Rs 975 during the day. But then came the deep fall, and the crips fell on their faces.
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