Sensex, Nifty settle lower; ONGC tanks 4%; Metro Brands jumps 12%

Domestic equity markets kicked off October on a weaker note as the headline benchmark indices settled lower on Tuesday. Traders are awaiting RBI's monetary policy due later this week. Also, the muted auto sales numbers disappointed the street amid a host of negative global cues, signaling higher interest rates for a longer period.

For the day, BSE's barometer Sensex tanked 316.31 points, or 0.48 per cent, to settle at 65,512.10. NSE's Nifty50 tanked 109.55 points, or 0.56 per cent, to end at 19,528.75. Broader markets outperformed the headline indices as the BSE midcap and smallcap indices settled in green. Fear gauge India VIX jumped about 3 per cent to 11.82-level.

Investors preferred to shun their equity exposure ahead of the monetary policy committee meeting this week. Markets were in weak terrain through the session, as traders trimmed their holding in automobile, oil & gas and metal shares. The stronger dollar once again weighed heavily on the rupee, which indicates that foreign investors may have once again pulled the plug on Indian equities, said Shrikant Chouhan, Head of Research (Retail), Kotak Securities.

"Technically, the Nifty has formed a bearish candle and on intraday charts it is still holding lower top formation, which is largely negative. For the bulls now, 19,580 could be the immediate resistance zone, above which the index could move up till 19,700-19,725. On the flip side, 19,450 and 19,480 would act as a strong support zone for the traders. Below 19,450, the selling pressure is likely to accelerate and the index could slip till 19,375-19,350," he added.

On a sectoral front, the NIfty PSU Bank index gained more than 2 per cent, while the Nifty media and consumer durable indices added about a per cent each. The Nifty realty index also settled in green. Among the laggards, the Nifty auto and oil & gas indices dropped more than a per cent each, while pharma, FMCG and healthcare indices also posted significant cuts.

In the Nifty50 pack, ONGC dropped more than 4 per cent, while Eicher Motors, Maruti Suzuki and Hindalco crashed more than 3 per cent each. Dr Reddy's Laboratories, NTPC and Sun Pharmaceuticals declined about 2 per cent each. Bharat Petroleum, Tata Motors, UPL and ICICI Bank were other key laggards.

Among the gainers, Bajaj Finance and Larsen & Toubro rose about 2 per cent each. Titan Company, Bajaj Finserv, Adani Ports and State Bank of India rose about a per cent each. IndusInd Bank, Ultratech Cement, HCL Technologies and Asain Paints were among the other key gainers for the day.

Consolidation continued given the rising US bond yields and dollar index, prompting FIIs to pull funds. While the moderation in oil prices may provide respite on the downside, said Vinod Nair, Head of Research at Geojit Financial Services.

"Infrastructure activity indicates an acceleration led by the rise in core sector output. The auto stocks declined due to mixed bag monthly data, while a near-normal monsoon will aid positive sentiment for consumption in the near term," he said.

A total of 3,956 shares were traded on BSE on Tuesday, of which 1,907 settled with gains. 1,860 stocks ended the session with cuts while 189 shares remained unchanged. Only 15 shares hit their upper circuit, whereas only nine shares tested the lower circuit levels for the day.

In the broader markets, Authum Investment & Infrastructure gained more than 16 per cent, while Raghav Productivity Enhancers gained over 14 per cent. Metro Brands rose over 12 per cent. Among the laggards, Sanmit Infra dropped about 6 per cent, while DCM Shriram, BF Utilities and Paramount Communications tumbled 5 per cent each.

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