Stock markets extended losses to a fourth consecutive session, with the S&P BSE Sensex shedding 287 points to close at 33,847 on Tuesday. That marked the first closing below 34,000 for the 30-scrip benchmark index since April 11. The Nifty index of National Stock Exchange (NSE) fell 98 points to close at 10,146. Weakness in the domestic markets came on the back of weak global cues, profit booking in some sectors and liquidity-related concerns in the NBFC sector, say analysts. Overall, the Sensex has lost 1,315 points, or 3.7 per cent, in four consecutive trading sessions.
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Losses in IT, pharma and FMCG stocks dragged the markets lower. Top laggards on the 50-scrip Nifty index were Sun Pharma, Asian Paints, Wipro, UltraTech Cement and Grasim, closing with between 3 per cent and 5 per cent lower.
With 1,241 stocks finishing lower against 510 stocks that advanced on the NSE, the market was in favour of the bears.On the BSE, 798 stocks advanced while 1,790 declined.
Analysts say a negative trading sentiment prevailed in the markets. “Weakness in the market is because of the overall negative trends…domestic as well as global,” news agency IANS quoted Astha Jain of Hem Securities as saying. “The quarterly results are mixed, adding to the negative sentiments among the investors.”
Asian Paints ended 5.2 per cent weaker, a day after the company’s quarterly earnings missed analysts’ estimates.
A string of defaults at a major non-banking financial company (NBFC) has battered the sector amid a liquidity crunch, while higher crude prices and weaker rupee continue to weigh on the trading sentiment.
“Profit booking in IT and pharmaceuticals stocks dragged the indices lower today… Investors chose to book some profits here as the tailwinds of depreciating currency are slowing,” said VK Sharma, head PCG and capital markets group at HDFC Securities. The Nifty IT index, comprising technology stocks, finished 2.8 per cent lower. Wipro, HCL Tech, Infibeam and TCS – finishing between 2.7 per cent and 4.3 per cent lower – led the declines in the sector. HCL Tech post-markets hours reported a 14.8 per cent rise in second-quarter net profit, beating analysts’ estimates.
Shares in state-run fuel retailers Hindustan Petroleum, Indian Oil and Bharat Petroleum closed 4.3 per cent, 1 per cent and 0.7 per cent higher respectively, despite a rating downgrade by Japanese brokerage Nomura.
Investors will keenly watch more quarterly report cards from India Inc going forward, say analysts. Index heavyweights ICICI Bank, Wipro and Dr Reddy’s Laboratories are slated to report their Q2 earnings this week.
Equities in other Asian markets also dropped as earnings season nerves in the US dented Wall Street, while a mix of negative drivers from Saudi Arabia’s diplomatic isolation to concerns over Italy’s budget and Brexit talks depressed the sentiment.
Net sale of equities by foreign portfolio investors (FPIs) stood at Rs. 511.91 crore on Monday, while net purchase by domestic institutional investors (DIIs) was at Rs. 303.21 crore, according to provisional data from the NSE.