Sensex falls over 150 points, Nifty tests 19,550; Bajaj Hindusthan, Tata Consumer down up to 3%; Cochin Shipyard jumps 15%

Indian equity benchmarks traded lower in early trade on Thursday, dragged by technology, metals and consumer good stocks. Although, gains in state-owned banks and energy shares capped some losses. The 30-share BSE Sensex slipped 185 points or 0.28 per cent to trade at 65,695, while the NSE Nifty was down 57 points or 0.29 per cent to trade at 19,554. Despite weakness in the headline indices, broader markets (mid- and small-cap shares) were positive as Nifty Midcap 100 rose 0.31 per cent and small-cap climbed 0.40 per cent.

On the global front, Asian markets declined today. Overnight, Wall Street indexes slipped after stronger-than-expected US services sector data suggested interest rates could remain higher for longer.

Back home, foreign institutional investors (FIIs) sold Rs 3,246 crore of shares on a net basis during the previous session, while their domestic institutional investors (DIIs) offloaded Rs 247 crore of stocks, exchange data showed.

Foreign portfolio investor (FPI) inflows in Indian equities were at a four-month low of Rs 12,262 crore in the month of August, data from the National Securities Depository Ltd (NSDL) showed.

"The FII selling has been triggered by the rising US bond yields and the strengthening dollar. With the yield from the US 10-year at 4.29 per cent and 2-year at 5 per cent, foreign investors are likely to sell further. In addition, Brent crude rising above $90 continues to remain a major concern," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Investors may exercise caution and on correction buy only high-quality stocks, preferably in banking, IT and capital goods, he mentioned. There is froth in the small-cap segment, which is driven by momentum, Vijayakumar added.

Seven out of the 15 sector gauges -- compiled by the NSE -- were trading in the red. Sub-indexes Nifty IT, Nifty Metal and Nifty FMCG were underperforming the NSE platform by falling as much as 0.30 per cent, 0.21 per cent and 0.22 per cent, respectively. On the flip side, Nifty PSU Bank and Nifty Oil & Gas rose 0.38 per cent and 0.27 per cent, each.

On the stock-specific front, Tata Consumer Products was the top loser in the Nifty pack as the stock cracked 2.26 per cent to trade at Rs 859. Sun Pharma, UltraTech Cement, Apollo Hospitals and Bajaj Finance fell up to 0.77 per cent.

In contrast, Coal India, Maruti, Dr Reddy's, UPL and BPCL were among the top gainers.

The overall market breadth was positive as 1,917 shares were advancing while 913 were declining on BSE.

On the 30-share BSE index, index heavyweights such as Infosys, Reliance Industries, HDFC Bank, Bajaj Finance and Hindustan Unilever (HUL) were among the top laggards.

Also, Bajaj Hindusthan Sugar, Gabriel India, HPL Electric & Power, Bikaji Foods International, Hariom Pipe and Shyam Metalics tanked up to 3.02 per cent. On the other hand, Cochin Shipyard, IRFC, IOL Chemicals, Rhi Magnesita, JP Power, Varroc Engineering and GRM Overseas jumped up to 14.59 per cent.

On Wednesday, Sensex had surged 100 points or 0.15 per cent to settle at Rs 65,881, while Nifty had moved 36 points or 0.18 per cent up to end the session at 19,611.

Nifty outlook

"We are just one more leap away from the 19,790 objective that we had set out with at the start of the week. However, the rapid rise in the closing hour rings in caution early today. Early dips need to be restrained above 19565, so as not to lose the upside momentum. We are now at two standard deviations away from the 20-SMA, and also at the upper extremity of a one-month trading range as noted yesterday too, and it is not surprising to face challenges here. However, unlike the previous ascent to this region, the present approach looks more assured, and the prospects of a range breakout is to be watched out for, rather than that of major swings lower, once rejection trades surface," said Anand James, Chief Market Strategist at Geojit Financial Services.

 

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