Sensex falls 421 points, Nifty ends at 11,202; auto stocks lead losses

Domestic benchmarks Sensex and Nifty ended on a negative note on Wednesday, erasing yesterday's gains on the back of weak global equities. Sensex closed 421 points lower at 38,071 and Nifty lost 97 points to 11,202. In the previous session, Sensex closed 588 points higher at 38,492 and Nifty rose 168 points to 11,300.

On the sectoral front, the trend was mixed today. Gains in pharma, PSU Banks, metal and FMCG were capped by losses in IT, auto and financial stocks. Infosys, HCL Tech, Nestle India, M&M, Reliance Industries and Tech Mahindra were among the laggards today, while IndusInd Bank, followed by UltraTech Cement, Tata Steel, Sun Pharma, L&T and ICICI Bank were among gainers.

Pharma shares rose today on news that US President Donald Trump plans to reduce the prices of drugs in the US,  which are the highest in the world. This would allow individuals to import prescription medications directly. NSE Pharma closed 3% higher today, with Dr. Reddy's gaining 6%, Torrent Pharma 4% and 3% rise in Divi Labs and Alkem stock prices.

Domestic equity market indices fell further today on weak Q1 earnings performance by index majors.

Domestic investors were also keeping an eye on the PM Modi's meeting with Heads of Banks and NBFCs today. Moreover, European shares also reversed the trend and turned negative, following weak global cues.

Global equities reversed the trend and fell on the back of an impasse in US economic revival package negotiations. US President Donald Trump on Tuesday said he did not support everything in a $1 trillion Senate Republican coronavirus relief proposal, but indicated that talks were continuing. Markets were also trading mixed on Wednesday, ahead of the FOMC outcome scheduled to end today. Rising coronavirus cases and ongoing tensions between the US and China also weighed on the sentiment.

Vinod Nair, Head of Research at Geojit Financial Services said," Global markets were generally undecided ahead of the US Fed Reserve meeting and mixed earnings reports in addition to rising virus cases forcing economies to reconsider restrictions to contain the spread. Stock specific action was also visible, post-earnings results, and this trend is expected to continue."

Meanwhile, share price of RIL fell after eight consecutive days of gain. RIL share lost 4.89% intra day to Rs 2,071 against previous close of Rs 2,177 on BSE. Later, the  stock closed 3.75% or Rs 81.60 lower at  Rs 2,095.  RIL stock fell after the conglomerate issued a clarification to BSE with respect to a report that it may buy Future Group's retail biz for Rs 27,000 crore. The firm said, "We are unable to comment on media speculation and rumors and it would also be inappropriate on our part to do so."Ajit Mishra, VP - Research, Religare Broking said, "Besides, the existence of a critical hurdle around 11,350 zones in Nifty added to the pressure. Markets will react to the outcome of Fed meet in early trade on Thursday i.e. July 30. The scheduled derivatives expiry combined with earnings would keep the participants on their toes."

Commenting on Nifty's near term outlook, Rohit Singre, Senior Technical Analyst at LKP Securities said,"  Index is in V shape recovery. If we look at a weekly chart, going forward 11k mark became good support holding above 11k mark index can see current momentum to continue towards immediate hurdle zone of 11300-11400 zone ".

On the currency front, Indian rupee ended stronger at 74.79 per dollar against the earlier close of 74.83 per dollar. The local currency was trading in a narrow range at the interbank forex market, ahead of the outcome of the US Federal Reserve's policy today.

Traders said investors also remained concerned over the rising coronavirus cases in the country. In India, domestic coronavirus cases saw a record jump to 15.3 lakh by Wednesday morning, with total deaths standing at 0.34 lakh. Worldwide, there were 168 lakh confirmed cases and 6.63 lakh deaths from the coronavirus COVID-19 outbreak.

Share Market Highlights: Sensex ends 421 points lower, Nifty at 11,202; pharma shares outperform