Sensex slipped more than 194 points to end at 37,935 in a see-saw session on Monday, tracking heavy selling in banking stocks. The 30-share index fell over 500 points from the day's peak, even as it managed to recover some lost ground to settle at 37,934.73, a loss of 194.17 points, or 0.51 per cent. NSE Nifty closed 62.35 points, or 0.56 per cent, lower at 11,131.80.
ICICI Bank, HDFC Bank, Axis Bank, IndusInd Bank and Bajaj Finance emerged as the major laggards. Asian Paints, HCL Tech, Infosys, TCS, Ultratech Cement and Tata Steel were among the top gainers.
"Hopes for more stimulus measures in major economies and data showing that China's industrial profits rose in June for a second straight month helped offset worries about rising US-China tensions and the surge in coronavirus cases worldwide. European markets declined marginally on Monday morning as investors continue to watch rising diplomatic tensions between the US and China, while travel stocks tumbled after the UK imposed quarantine measures on people returning from Spain," said Deepak Jasani, Head Retail Research, HDFC Securities.
"We expect a breather in the index, after rising for six successive weeks. Meanwhile, earnings announcements from select Nifty majors and upcoming derivatives expiry of July month contracts will keep the participants busy. Globally, the US Fed meet scheduled this week and key economic data announcements will also be on their radar. We suggest limiting leveraged trades and preferring index majors over others," said Ajit Mishra, VP - Research, Religare Broking.
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Asian shares ended on a mixed note on Monday amid concerns over growing US-China friction and fresh coronavirus cases in China and South Korea. European markets fell marginally in the early trade.
Shaktikanta Das' assurance
Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday assured the industries that the central bank was closely monitoring the economic situation. He also said that the central bank will not hesitate to take appropriate action, as he highlighted the need for stepping up investment in the infrastructure sector to reignite growth hit by the coronavirus crisis.
Bank, financial stocks
After RBI's Financial Stability Report last week, bank and financial stocks took a beating. The report had estimated that gross NPAs of scheduled commercial banks can rise to 14.7 per cent of the total loans by March 2021 (8.5 per cent in FY20) in a worst-case scenario. The GNPAs could rise to 12.5 per cent in the base case scenario.
Rural unemployment rate rises
According to fresh data from Center of Monitoring Indian Economy (CMIE), rural unemployment rate climbed to 7.66 per cent in week ended July 26 as against 7.1 per cent in the week to July 19 on account of fall in agricultural activities.
Marico's June quarter net profit saw a 23 per cent year-on-year jump to Rs 388 crore, while revenues fell to Rs 1,925 crore in Q1. Havells India reported a 64 per cent on-year fall in net profit to Rs 63.3 crore in the given quarter while revenue fell to 1,479.1 crore. Kotak Mahindra bank reported an 8.5 per cent on-year decline in standalone net profit to Rs 1,244.4 crore, while net interest income rose to Rs 3,723.9 crore.
Number of coronavirus cases worldwide has crossed 1.6 crore and the deaths are more than 6.5 lakh. In India, the death toll due to the disease is nearing 33,000-mark and the number of infections has topped 14 lakh, official data showed.
"The short term trend of Nifty is range bound with weak bias. The momentum in the market could expand only a sustainable move beyond the range of 11,250 and 11,050 levels in the short term. Upside breakout could pull Nifty towards 11,550 and a downside breakout of the range open lower target of 10,900-10,850 in the near term," said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
"Technically, Nifty formed a bearish candle today. Overall while declines are being bought, follow up is missing at higher levels. It requires a decisive range breakout for the next leg of rally. Stock specific action is likely to continue with a lot of heavyweights reporting their earnings over the next few days. Investors would also watch out for commentary from the US Fed monetary policy meeting on Wednesday," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Service.