Bombay Stock Exchange on Diwali evening
By S Jha
New Delhi, February 12: A day long mayhem in the PSU stocks on Monday wiped out almost Rs 3.50 lakh crore of valuations in a single session. The rout in the PSU stocks saw the ripple effects spreading over to the indices. Nifty dived by 166 points to come nearer to the consensus views among the traders of the short term trading range of the index.
The market participants have been claiming that Nifty is range bound in 21500 to 22050. Nifty had breached the level of 21600 during the day. The rout in the Bank Nifty has been intense. In one month, Bank Nifty has lost over 3000 points. Bank Nifty was trading above 48100 level last month. Now the banking index has slumped to 44882 level.
The equity market is now in the last phase of the earning season. The quarterly numbers of the PSU stocks have been seen by market participants below par. The rout in the PSU stocks had begun a few days before the presentation of the interim budget. The rail stocks had led the rout in the PSU stocks. The interim budget failed to support the euphoria in the rail stocks. Afterwards, Rail Vikas Nigam Limited, which had seen the most furious run last month, had come with weak set of numbers. Since them, RVNL has slid from the high of Rs 312 to Rs 229 now. The ripple effects have downed the likes of IRCON, IRFC, Rail Tel, IRCTC, and others.
SJVNL and NHPC went under the hammer on Monday after reporting below par numbers in their respective quarterly results. Both the scrip hurtled to 20 per cent lower circuit. The rout in the PSU stocks has almost been secular as even the likes of BEML tanked by over 10 per cent on Monday.
The power sector PSY stocks have been hammered in the last few sessions. The newly listed IREDA remains locked in the lower circuit. Power Finance Corporation and Rural Electrification Corporation have seen deep hair cuts.
The fund houses were net positive in their actions on the bourses. Even the foreign institutional investors were net buyers. Their domestic counterparts bought equities heavily on Monday. The US bourses continue to extend their gains. NASDAQ is extending the bull runs. Yet, the Indian indices are tanking in signs that the retailers are now gripped with panic amid the approaching Lok Sabha elections.
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