Sensex falls 299 pts; Nifty settles below 19,700; ITC & Kotak Bank fall 4%

Indian equity indices extended their fall to the second straight session as headline peers settled lower on Monday. Kicking off the week on a negative note, traders reacted to the earnings of behemoths like Reliance Industries, ICICI Bank and Kotak Mahindra Bank. ITC's news of the demerger of the hotel business and Tata Steel's earnings due later today kept traders hooked to the edges.

For the day, the 30-share pack BSE Sensex dropped 299.48 points, or 0.45 per cent, to settle at 66,384.78, while NSE's Nifty50 plunged 72.65 points, or 0.37 per cent, to end the day at 19,672.35. Broader markets outperformed the headline peers as BSE midcap and smallcap index settled in green. Fear gauge India VIX spiked more than a per cent to 11.65-levels.

Indian markets traded on a weak note continuing its second day of closing in red as the heavyweights like Reliance’s weak results were seen in the market. Also, the market is seeing some profit booking as the week is full of economic events which will lead to volatility, said Riches Vanara, Technical And Derivatives Analyst, stoxbox.

"Today Nifty opened a subdued note and attempted to reclaim the 5-DEMA. However, it succumbed to selling pressure and marked a second new low in the throwback rally from the highs of 19,991. With this, the index has added its second distribution day. The index now holds immediate support in the zone of 19,645-19,600," he said.

On a sectoral front, the Nifty FMCG index dropped 2 per cent for the day, while the Nifty metal and oil & gas indices declined about a per cent each. Nifty consumer durable and private bank indices were the other key laggards for the day. Among the gainers, the Nifty healthcare and pharma indices were the leaders, followed by the Nifty realty index.

In the Nifty50 pack, ITC crashed over 4 per cent on the back of the hotel business demerger, while Kotak Mahindra Bank tumbled about 4 per cent after a mixed performance in the Q1. Tech Mahindra ended 3 per cent down, while Reliance Industries shed 2 per cent. Britannia Industries, JSW Steel and Tata Steel were the other key laggards.

Among the gainers, IndusInd Bank, SBI Life Insurance Company and Dr Reddy's Laboratories gained 2 per cent each. Mahindra & Mahindra also rose about 2 per cent, while Ultratech Cement, Power Grid, Bajaj Finserv, Hero MotoCorp and Tata Consumer Products were the other key gainers for the day.

Volatility has re-emerged as initial Q1 results are below the expectations. Sector wise setbacks were experienced in IT and FMCG, unveiling weak demand and high input costs, said Vinod Nair, Head of Research at Geojit Financial Services.

"Banks are mixed while Pharma stocks are withholding the volatility in anticipation of a better demand from developed economies, reduction in US pricing issues and expansion in operating margins. Investors are also watchful of the upcoming FOMC meeting, addressing rate hike and quantitative tightening measures, which could have an implication on FIIs inflows," he said.

A total of 3,855 shares were traded on BSE on Monday, of which 1,936 settled with cuts. 1,763 stocks ended the session with gains while 156 shares remained unchanged. A total of 266 shares hit their upper circuit, whereas 272 shares tested the lower circuit levels for the day.

In the broader markets, Wendt hit an upper circuit of 20 per cent, while Aarti Drugs gained 19 per cent after a solid Q1 performance and buyback buzz. SJVN and Texmaco Rail added 14 per cent for the day, while Inox Wind ended 12 per cent up.

Among the losers, Coffee Day Enterprises crashed more than 19 per cent after IndusInd Bank filed for bankruptcy in NCLT. Abans Holdings dropped more than 15 per cent, while Tejas Networks declined more than 8 per cent. Hikal ended 7 per cent lower for the day.

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