The market succumbed to selling pressure on Tuesday after rallying 1 percent in previous session. Banking & financials, capital goods, metals and auto stocks saw profit booking. Not only benchmarks but also broader markets were under pressure.
The 30-share BSE Sensex dropped 150.77 points or 0.58 percent to 25705.93 and the 50-share NSE Nifty slipped 43.15 points or 0.55 percent to 7829.10. The BSE Midcap index fell 0.77 percent and Smallcap lost 0.55 percent. The market breadth was negative as about 1520 shares declined against 1101 shares advanced on the Bombay Stock Exchange.
Overall not only India but also global markets continued to be rangebound ahead of major event – Federal Reserve’s two-day meet that will begin on September 16. The volatility may continue, feel experts.
Even if Fed hikes rate this week , Indian market is not going to see a major shake up as the worst bout of volatility is behind us, says Ajay Srivastava, CEO at Dimensions Consulting.
He strongly believes there is one more leg of downsizing due during which market will test fresh lows.
Global markets were mixed. In Asia, China’s Shanghai was down 3.55 percent and Hang Seng declined 0.5 percent as cautious sentiment prevailed ahead of the Fed meet. Japan’s Nikkei pared gains, up 0.3 percent after Bank of Japan maintained its expansionary monetary policy at an annual pace of 80 trillion yen. European markets like France’s CAC and Germany’s DAX gained 0.4-0.7 percent while Britain’s FTSE declined 0.2 percent.
On the home turf, Bank Nifty lost 1 percent after rising 1.8 percent in previous session. Axis Bank lost 2.7 percent and ICICI Bank was down over 1 percent. SBI, HDFC Bank and HDFC declined more than half a percent.
Among metals, Vedanta, Tata Steel and Hindalco Industries plunged 3-5 percent. Tata Motors plummeted 3.7 percent; its subsidiary Jaguar Land Rover has launched new Jaguar F-PACE in the Frankfurt Motor Show on September 14.
L&T tumbled 3 percent after Deutsche Bank has downgraded the stock to hold and cut price target to Rs 1,560 apiece. The brokerage also slashed earnings estimates by 2 percent/16 percent for FY16/17 due to demand pushback expectations.
Maruti Suzuki was up 0.25 percent after the Reserve Bank of India allowed FIIs to invest upto 40 percent in the company against 24 percent earlier. ITC, Sun Pharma, Reliance Industries, HUL and NTPC were other gainers in trade, up 0.5-1 percent.
In the broader space, Gujarat Gas has relisted today, down 13.36 percent to close at Rs 646 after amalgamation of various subsidiaries with itself.
Meanwhile, Power Minister Piyush Goyal promised relief to power distribution companies, saying the government is working with states to cut power distribution companies’ massive debt load and is committed to bringing down discom losses in next 2-3 years.