80% Nifty stocks hit 52-week low, but Sensex recovered 16% from lower circuit to close higher

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It was a surprise Friday for the market on March 13 as Sensex and Nifty hit a lower circuit for the first time since the 2008 financial crisis, which dragged 1,330 stocks to a 52-week low intraday. However, recovery from late morning helped the benchmark indices recovered 16 percent from day’s low to close sharply higher.

The BSE Sensex climbed 1,325.34 points, or 4.04 percent, to close at 34,103.48. The Nifty50 jumped 365.05 points or 3.81 percent to 9,955.20, after hitting multi-year lows of 29,388.97 and 8,555.15, respectively. However, indices lost over 9 percent in the week.

The benchmark indices showed smart recovery after falling over 30 percent from their record highs seen in January. Now, after March 13’s rebound, indices were still lower by 20 percent from the record highs.

The sentiment was so hurt by the novel coronavirus pandemic, that 1,330 stocks touched a 52-week low intraday. Of these, 1,014 stocks hit a fresh 52-week low on March 13.

Out of those total stocks, 304 hit all-time low during the day including Wipro, IOC, Coal India, ONGC, Bandhan Bank, PNB, RBL Bank, Oil India, BHEL, HUDCO, Chalet Hotels, NBCC and Equitas Holdings, among others.

The negative reaction was obvious given the fall in global markets amid concerns over global growth, especially after the rapid spread of the COVID-19 pandemic across the world.

Globally, around 1.4 lakh people have been infected by the virus. Over 5,000 people have died so far.

Investors across the world became more worried when the cases started rising speedily in the United States and Europe from where the maximum investment comes in. Several industries have been already impacted by the virus, including aviation, hotels, travels and tourism, multiplex and malls.

In fact, 80 percent of Nifty50 and BSE Sensex stocks touched 52-week lows intraday including blue chips Reliance Industries (RIL), TCS, HDFC Bank, HDFC, ITC, HCL Technologies, SBI, L&T and Axis Bank.

However, 10 stocks from Nifty50 list – ICICI Bank, Eicher Motors, Bharti Airtel, Bharti Infratel, Dr Reddy’s Labs, Yes Bank, HUL, Britannia Industries, Asian Paints and Nestle India – did not hit 52-week lows.

In fact, all Nifty50 stocks rallied 7-46 percent from their day’s lows.

The market rebounded backed by short covering, value buying, DIIs support and recovery in global peers on stimulus hopes. But, experts are not convinced with the rally considering weak market conditions. They expect volatility to continue in coming days till the pandemic fears fade globally.

“Temporary relief was seen in the global markets based on stimulus hopes. Investors are still advised to be alert since the volatility, as measured by the volatility index has reached all time highs,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“Accumulating quality stocks which are available at lower valuations would be a good strategy. Sentiments around the spread of the virus will continue to drive the markets and any signs of the rate of infections falling will be a positive,” he said.

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