Sensex snaps 6-day gains, falls 111 pts; Nifty ends Jan series above 11,000, up 6%
Benchmark indices lost ground for the first time in last seven consecutive sessions, with the Sensex falling more than 100 pts on Thursday but the Nifty ended the January series with 6 percent gains.
Profit booking in technology, auto, pharma stocks, and PSU banks after announcement of recapitalisation amount for current fiscal pushed the market lower. However, gains in private banks, metals and infra stocks capped losses.
Sharp rise in oil prices and weak Asian cues due to losses in dollar dampened the market sentiment today. Also there was an increase in volatility during the day as traders rolled over their positions to the February series.
The 30-share BSE Sensex has broken the 36,000 level intraday, but trimmed losses in last hour of trade to end down 111.20 points at 36,050.44.
The 50-share NSE Nifty managed to hold 11,000-mark amid selling pressure throughout the session, before closing lower 16.30 points at 11,069.70.
In January series, the Nifty rallied 5.65 percent and the Sensex rose 6.5 percent while for the week, frontline indices gained more than 1.5 percent.
“Before Budget announcement on February 1, we can see further short covering, which can take the Nifty higher towards 11,200. In case of no negative surprise, the Nifty would continue to form a base near 11,000. This uptrend should continue,” ICICIdirect said.
In the midcap space, however, profit booking is quite visible before the major Budget announcement, it feels.
The broader markets underperformed frontline indices, with the Nifty Midcap index falling 0.8 percent and the BSE Smallcap slipped 0.7 percent. About three shares declined for every two shares rising on the BSE.
Meanwhile, crude oil prices rose to their highest level since December 2014 after decline in US crude inventories and a weaker US dollar. Brent crude oil futures hit USD 71.20 a barrel – the highest since early December 2014. It was trading at USD 70.81 a barrel, up 0.4 percent at the time of writing this article.
The Nifty PSU Bank was the biggest loser among sectoral indices, falling more than 5 percent after the government announced Rs 88,000 crore recapitalisation amount for the current fiscal.
Punjab National Bank, Syndicate Bank, Indian Bank, Bank of Baroda, SBI and Canara Bank were down 5-7 percent, but private banks – ICICI Bank (up 2.3 percent), HDFC Bank (up 0.88 percent), Kotak Mahindra Bank (up 1.13 percent) and Axis Bank (1.34 percent) – outperformed.
Nifty IT, Auto and Pharma indices lost 1 percent each but Metal and Private Bank indices gained a percent each.
Maruti Suzuki fell 1.66 percent ahead of earnings that announced after market hours. Profit grew by 3 percent and revenue rose 14 percent YoY during the quarter ended December 2017. The company revised its method to calculate royalty which would result in lower royalty payments for new model agreements starting the Ignis.
Dr Reddy’s Labs shed 2 percent after the drug maker reported a 29 percent decline in profit due to lower North America business. UPL was biggest loser among Nifty 50 stocks, shedding 6.7 percent after operational earnings missed analyst expectations.
TCS, Adani Ports, Aurobindo Pharma, Hero Motocorp, Infosys and Bharti Airtel among others were down 1-3 percent whereas Vedanta, L&T, Indiabulls Housing, Tata Steel, UltraTech Cement and GAIL gained 1-2 percent.
On the global front, Asian markets ended lower as US dollar extended losses while European stocks were trading flat at the time of writing this article.