Sensex, Nifty retreat on Maha drama
THE SENSEX TOUCHED ITS ALL-TIME INTRA-DAY HIGH OF 41,120.28 BEFORE CLOSING DOWN BY 67.93 POINTS AT 40,821.30 ON TUESDAY
MUMBAI: Market benchmark BSE Sensex retreated from its record high level to close down by about 68 points on Tuesday mainly due to profit booking in telecom, information technology (IT) and auto stocks amid growth concerns and evolving political drama in Maharashtra.
The 30-share index touched its all-time intra-day high of 41,120.28 before closing down by 67.93 points or 0.17% at 40,821.30.
The broader Nifty also soared to a new peak of 12,132.45 in day trade before giving up gains to end lower by 36.05 points or 0.30% at 12,037.70.
Bharti Airtel was the biggest loser among Sensex stocks, dropping by 4.34% after Icra downgraded the long-term rating of the company due to higher-than-anticipated provision pertaining to the Supreme Court judgement on dues payable towards license fees on adjusted gross revenues (AGR) as well as spectrum usage charge in the latest quarterly results.
Key IT stocks Tata Consultancy Services and Infosys also dropped by 1.6% and 1.05%, respectively, as investors preferred to book profits at high levels. HCL Technologies fell 1.29%.
Auto stocks also declined due to growth concerns.
“Market elevated to a record high coupled with global cheer on trade deal and domestic earnings revival expectation. However, volatility ahead of derivative expiry, political drama and caution on upcoming GDP (gross domestic product) data led investors to book some profit,” Vinod Nair, head of research at Geojit Financial Services. Rising foreign inflows and confidence that government will address the fiscal gaps through divestment can maintain the buoyancy in the market, he added.
“Profit booking was clearly on investors’ radar ahead of expiry and before the crucial GDP data due on Friday as investors avoided taking long positions,” Paras Bothra, president of equity research, Ashika Group, commented.
Sectorally, BSE telecom index plunged 4.93%, followed by teck, IT, capital goods, industrials, auto, realty and power indices that declined up to 1.95%. However, BSE bankex, finance and FMCG indices closed higher. Broader BSE midcap and smallcap indices declined up to 0.79% on Tuesday.
Dhiraj Relli, managing director and CEO, HDFC Securities said though macros have still not turned positive and corporate earnings growth remains sluggish, investors are enthused by ample liquidity in the system driving transmission, gradual normalisation of risk appetite of banks, unsold housing inventory beginning to correct, PSU banks being recapitalised, NPA (nonperforming asset) cycle peaking out and base becoming easier post December quarter.