Sensex falls for 5th day, Nifty closes below 8100; banks weigh
Tue Dec 20 2016
Rajesh Sharma (2002 articles)

Sensex falls for 5th day, Nifty closes below 8100; banks weigh

The market slipped for the fifth consecutive session Tuesday with the Nifty closing below 8100-mark, weighed by banking & financials stocks. The broader markets underperformed benchmarks with the BSE Midcap and Smallcap indices falling 1.4 percent and 0.9 percent, respectively.The 30-share BSE Sensex dropped 66.72 points to 26307.98 and the 50-share NSE Nifty slipped 21.95 points to 8082.40 amid lower trading volumes. The market breadth weakened further in last hour of trade; more than two shares declined for every share rising on the Bombay Stock Exchange.

Overall the market has been rangebound, though it fell further in today’s trade. The broad range for the Nifty could be 7900-8300 in short term, experts say.

“We might see further slide in index ahead but the downside seems capped from the current level,” Jayant Manglik of Religare Securities says. So, traders should limit their positions now and wait for further clarity, he advises.

According to Dilip Bhat of Prabhudas Lilladher, markets are possibly in the wait-and-watch mode following demonetisation and a resultant earnings downgrade. Uncertainties on the international front could keep the markets dull, he says.

Meanwhile, the rupee breached 68 against the US dollar; closing at 68.03, down 17 paise from previous value.

Banking & financials, particularly PSU banks and non-banking finance companies hit hardest. The Nifty PSU Bank index lost 2.5 percent and Financial Services shed 1 percent.

State Bank of India, Bank of Baroda, Punjab National Bank, ICICI Bank and Axis Bank were down 1-2.6 percent while HDFC Bank outperformed, up 0.8 percent.

Non-banking finance companies like Bajaj Finance, M&M Financial, Shriram Transport and Manappuram Finance dropped 2-5 percent.

Micro lender Bharat Financial Inclusion was down 3.6 percent as collection efficiency remained lower and disbursements declined after demonetisation. Analysts are also worried about fears of likely farm loan waiver in Uttar Pradesh ahead of elections and Maharashtra government recommendations to probe alleged violations of RBI guidelines.

Idea Cellular shares dropped 3.5 percent. Motilal Oswal in its research note said, “The company’s management highlighted both Reliance Jio and demonetisation have severely impacted revenue stream. The larger impact is on the data segment, as consumers are not porting out numbers (using primary simcard for voice) while large portion of data traffic is shifting to free offering.”

Technology stocks bucked the trend with the Nifty IT index rising 1 percent as the rupee breached 68 against the US dollar. TCS gained 2.2 percent and Infosys was up 1 percent.

HDFC, Lupin, Bajaj Auto, Asian Paints, HUL, Tata Steel and Hero Motocorp were down 1-2 percent while ITC, NTPC, L&T and GAIL rose 0.6-1 percent.

European stocks were flat in spite of two separate attacks in the German and Turkish capitals. Asian markets ended mixed with the Nikkei rising half a percent. The Bank of Japan announced its decision to hold interest rates in negative territory and kept the 10-year government bond yield target at around zero percent.

Rajesh Sharma

Rajesh Sharma

Rajesh Sharma is Correspondent for Stock Market of South East Asia based in Mumbai. He has been covering Asian markets for more than 5 years.

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