The domestic equity market took a breather on Tuesday after a five-day rising spree as investors booked profits in metal, financials and auto counters, amid weak cues from international markets after IMF lowered its global growth projections for 2019 and 2020.
The 30-share BSE Sensex dropped 134.32 points to end at 36,444.64, while the broader NSE Nifty finished 39.10 points lower at 10,922.75.
Participants were seen taking money off the table after the recent rally, even as the wider sentiment remained positive, underpinned by better-than-expected Q3 earnings by several bluechips.
The BSE Sensex, after resuming higher at 36,649.92, advanced to 36,650.47 on buying by domestic institutional investors (DIIs) as well as retail participants.
However, market quickly slipped into the negative zone as investors chose lock in gains in recent outperformers, dragging down the key benchmark to a low of 36,282.93 before ending at 36,444.64 down 134.32 points, or 0.37%.
The gauge had rallied over 725 points in the previous five sessions.
Likewise, the 50-stock NSE barometer Nifty finished 39.10 points, or 0.36%, down at 10,922.75 after hitting the day’s high of 10,949.80 and a low of 10,864.15.
Brokers said investors turned cautious and preferred to log profits in recent gainers, dragging down key indices.
“The market tracked other Asian markets following IMF’s weak forecasts of global growth prospects,” said Paras Bothra, President, Equity Research, Ashika Group.
“While India’s economic forecasts were retained, concerns were raised over the difficulties in containing the fiscal deficit. Continued weakness in the rupee favoured IT and Pharma stocks while majority of other sectors were under pressure,” he added.
The IMF lowered its global growth projections for 2019 and 2020 to 3.5% and 3.6% respectively, citing slowdown in several advanced economies around the world more rapidly than previously anticipated.
Meanwhile, India is projected to grow at 7.5% in 2019 and 7.7% in 2020, an impressive over one percentage point ahead of China’s estimated growth of 6.2% in these two years, the IMF said on Monday, attributing the pick up to the lower oil prices and a slower pace of monetary tightening.
The International Monetary Fund in its January World Economy Outlook update on Monday said India would remain the fastest growing major economies of the world.
Foreign portfolio investors (FPIs) continued their selling activity on domestic bourses here. They sold shares worth a net ₹299.79 crore, while domestic institutional investors (DIIs) made purchases to the tune of ₹520.80 crore Monday, provisional data showed.
Stocks in the metal segment faced heavy selling after most base metals weakened at the London Metal Exchange (LME) on demand concerns after economic growth in top metals consumer China slowed to its weakest in 28 years.
The laggards in the Sensex kitty were Vedanta (3.50%), Tata Steel (3.13%), M&M (3.08%), HCL Tech (2.18%), Bharti Airtel (2%), Maruti Suzuki (1.84%), L&T (1.02%), Asian Paint (0.99%) and HDFC (0.86%).
Other losers were PowerGrid (0.73%), SBI (0.70%), HDFC Bank (0.63%), ICICI Bank (0.61%), Coal India, Tata Motors, TCS, NTPC, IndusInd Bank and ONGC.
On the other hand, Sun Pharmaceuticals emerged as the top gainer by surging 4.95% after it replaced its domestic formulations distributor Aditya Medisales with its own subsidiary in the backdrop of a second whistleblower complaint filed against the company.
Other winners were Kotak Bank up 1.92%, Bajaj Finance 1.07%, Hero MotoCorp 1.05%, Bajaj Auto 0.35%, Axis Bank 0.23%, Infosys 0.22%, HUL 0.09%, ITC Ltd 0.03% and RIL 0.02%, cushioning the fall.
Sectorally, BSE metal fell the most at 2.31%, followed by auto 0.86%, infrastructure 0.60%, capital goods 0.42%, power 0.26%, teck 0.13% and bankex 0.13%.
While healthcare index surged 1.17%, realty 0.91%, consumer durables index rose 0.90% and oil & gas 0.41%.
The broader markets too succumbed to profit-booking, with the small-cap index and mid-cap indices falling up to 0.49%.
In global markets, most of the other Asian markets ended lower and European shares too were down in their early deals.
The Shanghai Composite Index dropped 1.18%, Hong Kong’s Hang Seng fell 0.87%, Japan’s Nikkei shed 0.47% and Korea’s Kospi fell 0.32%.
In the euro zone, Frankfurt’s DAX was down 0.25%, while Paris CAC 40 shed 0.23%. London’s FTSE eased 0.17%.
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