Sensex slips 180 pts, Nifty manages to hold 9500; JP, Adani Groups stocks rally

After three weeks of consolidation, equity benchmarks hit one-month closing low Tuesday as the Sensex shed 291 points intraday on correction in major sectors – banks and technology. Likely increase in banks’ provisioning in FY18 and profit booking could be main reasons for selling pressure on first day of truncated week, as experts continuously saying the market currently is highly valued with pricing in all major positives.

As of now, there is no strong trigger that can drive the market up. June quarter earnings, which will begin next month, could be the next trigger but that is also not expected to support the market. Investors also maintained cautious stance ahead of GST implementation (effective from July 1) that is likely to hit company’s earnings for one or two quarters.

The 30-share BSE Sensex was down 179.96 points at 30,958.25 and the 50-share NSE Nifty slipped 63.55 points to 9,511.40 after hitting day’s low of 30,847.08 and 9,473.45, respectively.

According to, Mitessh Thakkar of miteshthacker.com, the 9,480 could be immediate support level for the Nifty but if it breaks that level decisively then the 9,400-9,350 can be broken in near term.

“Next crucial support for the index is now around 9450 level which is a confluence zone formed by 50-DMA (9452) rising trend line and 61.8 retracement level of near-term rise (9341-9709),” GEPL Capital said.

Nilesh Shah of Kotak Mahindra Asset Management Company believes that consolidation phase could last a little longer but this is the right time to build a portfolio from a long-term view.

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The broader markets also caught in bear grip as the BSE Midcap index fell 0.8 percent and Smallcap lost 1.6 percent on weak breadth. About five shares declined for every two shares advancing on the exchange.

All sectoral indices barring FMCG ended in red.

PSU banks hit badly today, with the Nifty PSU Bank index down more than 3 percent after the Reserve Bank of India asks banks to make 50 percent provisioning on the 12 loans which are worth around Rs 1.9 lakh crore. The Nifty Bank fell over a percent.

PNB, Canara Bank, Allahabad Bank, Bank of Baroda, Andhra Bank, SBI and Union Bank were down 3-5 percent while private banks like Kotak Mahindra Bank, Axis Bank, HDFC Bank and ICICI Bank slipped 0.6-2 percent.

Infosys was down 1.8 percent its 36th AGM that concluded on last Saturday.

Among others, Asian Paints, L&T, Bajaj Auto and Cipla fell over a percent while Bharti Airtel, ONGC and Hero Motocorp gained 1-1.6 percent. Heavyweights ITC and HDFC were also marginally higher.

Jaypee Group stocks hogged the limelight as Jaiprakash Associates, Jaypee Infratech and Jaiprakash Power Ventures rallied 12-20 percent while Adani Group stocks like Adani Enterprises, Adani Power, Adani Transmission, Adani Ports rose 0.6-4.5 percent.

Grasim gained 3.4 percent and Aditya Birla Nuvo was up 3.8 percent as companies fixed July 20 as record date for the composite scheme of arrangement between Aditya Birla Nuvo and Grasim Industries and Aditya Birla Financial Services Limited (now known as Aditya Birla Capital) and their respective shareholders and creditors.

Max Financial and Max India gained 2 percent each on likely change in structure of the deal between Max Life Insurance and HDFC Life.

Tejas Networks closed at Rs 263.50, up 2.5 percent over issue price of Rs 257 on debut.
On the global front, European markets were moderately lower after the president of the European Central Bank, Mario Draghi said a premature ending to monetary easing could lead to another recession. Asian markets closed mixed.