Sensex below 33K, Nifty at lowest closing level since Oct 23; bond yields drag PSU banks

Benchmark indices extended losses for the second consecutive day Tuesday, with the Sensex closing below 33,000-mark on weak Asian cues and unlikely rate cut post increase in inflation.

L&T, HDFC twins, Infosys, ITC pushed the market lower; but Reliance Industries (up 1.3 percent) and auto stocks capped losses.

The 30-share BSE Sensex was down 91.69 points at 32,941.87 and the 50-share NSE Nifty fell 38.40 points to 10,186.60, the lowest level since October 23, amid volatility.

“Volatility emerged as hopes of a near term rate cut by RBI has faded given the spike in October CPI inflation to 3.58 percent. Global cues were not helping either amid uncertainty over US tax reform, slowdown in Chinese factory output and growing political issues in UK,” Vinod Nair, Head of Research, Geojit Financial Services said.

According to Anand James (Chief Market Strategist) of Geojit Financial Services, the movement in rupee index and the quantum of FII investments could be scrutinised to derive short-term trends in the market.

The broader markets also traded in line with benchmarks, with the Nifty Midcap falling 0.2 percent. About 1,034 shares declined against 699 advancing shares on the NSE.

Global cues were subdued amid uncertainty over US tax reform, slow down in Chinese factory output and growing political issues in UK. China’s Shanghai Composite declined 0.5 percent and Australia’s ASX 200 was down 0.88 percent.

Meanwhile, wholesale-based inflation grew to 3.59 percent, hitting a six-month high in October, due to increase in prices of food and fuel products. It was at 2.6 percent in September and 1.27 percent in last October.

Bharti Infratel slipped 4.5 percent as Bharti Airtel sold Rs 3,325 crore worth of shares through block deals in opening trade today.

L&T lost 2.5 percent on top of 2 percent loss in previous session as the management on Saturday said it would not meet its full year order inflow growth guidance of 12-14 percent.

PSU banks were down as 10-year bond yield hit 7.06 percent, the highest level since September 2016. State Bank of India declined 0.6 percent while Canara Bank and PNB were down 1.7 percent each.

Eicher Motors declined 1.6 percent as Q2 earnings missed expectations.

Ahead of earnings after market hours, Sun Pharma was down 1.2 percent and Bank of Baroda was up 1.5 percent. The bank’s Q2 profit missed analyst estimates, falling 36 percent YoY but asset quality improved QoQ; while the pharma major’s profit declined 59 percent YoY.

HUL and Havells gained nearly half a percent as Credit Suisse upgraded both to outperform from neutral owing to GST rate revisions.

Index heavyweights HDFC, HDFC Bank and ITC were down over half a percent whereas Axis Bank, Hero MotoCorp, M&M and Bajaj Auto gained 1-2 percent.

Dhanlaxmi Bank, Karur Vysya Bank and PTC India Financial and NCC were down 3-7 percent post weak earnings.

Asian Paints was down 1.7 percent and Kansai Nerolac down 2 percent after disappointing numbers from Shalimar Paints that fell 10 percent.
Khadim India closed 8 percent lower at Rs 688.50 per share on first day.