6-day bull run ends! Sensex falls 129 points on profit booking

Mumbai: Led lower by profit-booking in banking and financial stocks, flagship equity indices snapped their six-day winning run on Thursday, although buying in index heavyweights - Reliance Industries, Bharti Airtel, TCS - capped losses. Weakness in European shares and a record spike in Covid-19 cases in India also soured the market mood.

Going ahead, the pace of coronavirus infections in the country, and global cues will be key for Indian markets.

“The markets were undecided and finally ended slightly negative, after 6 successive days of gains. The banking index which had driven the gains for the last few days was incidentally the biggest loser in today’s trade,” said Vinod Nair- Head of Research- Geojit Financial Services.

“Global cues were also mixed after Asian markets ended positive but European markets were awaiting details on ECB’s stimulus plans. Domestically, markets still seem to be forward-looking, ignoring the recent quarterly results and economic data, and anticipating a turnaround in the economy,” he added.

BSE barometer Sensex reversed initial gains to settle 129 points 0.38 per cent lower at 33,981, with banking stocks contributing the most to the benchmark’s decline.

Mortgage lender Housing Development Finance Corp (HDFC) was the top drag as it shed 3.95 per cent. Top private lender HDFC Bank followed next, with a 1.84 per cent decline. Rivals Kotak Mahindra Bank and ICICI Bank dropped 3.67 per cent and 2.47 per cent, respectively.

In the 30-pack index, 15 shares advanced and 15 declined with Tech Mahindra as the best performer and Asian Paints as the worst.


Peer Nifty shed 32 points to close at 10,029 points.

Despite the negative close, the market breadth was marginally inclined towards the gainers, as advance-decline ratio stood at 1.1:1 on the BSE.

The broader market declined but managed to outperform the benchmark. BSE Midcap and BSE Smallcap dropped 0.06 per cent and 0.05 per cent, respectively.

BSE Bankex was the top sectoral loser as it shed 2.70 per cent, while BSE Finance index dropped 2.54 per cent. BSE Telecom index, on the other hand, was the top sectoral gainer as it advanced 3.47 per cent.

Telecom major Bharti Airtel rallied 3.89 per cent in late trade after reports that Amazon.com is in early-stage talks to buy a stake worth at least $2 billion in mobile operator.

Cancer care chain HealthCare Global Enterprises rose 5.14 per cent after US based private equity fund CVC Capital made a revised offer of Rs 130/ share for acquiring about 31 per cent stake and another 26 per cent stake through open offer.

From here, the path of the market in the near-term was uncertain.

“Technically, the Nifty has made a lower top compared to June 3 but did not close at the intraday low. Hence it continues to give mixed signals after registering large gains over the last 6-7 days,” said Deepak Jasani, Head Retail Research, HDFC Securities.

MARKET AT A GLANCE

• Sensex drops 0.38% or 129 points to 33,981
• Nifty sheds 0.32% or 32 points to 10,029
• Half of Sensex stocks close lower
• Top Sensex losers: Asian Paints down 4.85%, Bajaj Finance 4.13%
• Top Sensex gainer: Tech Mahindra up 5.34%, Sun Pharma 3.98%,
• Market breadth marginally favours the bulls; advance-decline ratio 1.1:1
• BSE Midcap index down 0.06%, BSE Smallcap 0.05%
• Sectoral Space: Bankex top loser, falls 2.70%; RBL Bank drops 6.31%, City Union Bank 5.16%
• BSE Finance index down 2.54%; Cholamandalam Investment down 8.41%, Bandhan Bank 6.47%
• BSE Telecom top gainer, up 3.47%; Vodafone Idea up 6.41%, Tejas Networks 4.98%
• Bharti Airtel jumps 3,89% on Amazon $2 billion stake buy report
• Multiplex operators Inox Leisure, PVR rally 15.49%, 6.63%, respectively

WHO MOVED MY MARKET

• Traders locked in gains

Benchmark indices took a breather on Thursday after six-days of stellar rally, mainly on account of profit-booking in banking counters. “This pause is largely on the expected lines and we may see further consolidation ahead. However, we feel Nifty could make another attempt to test 10,250 levels,” Ajit Mishra, VP - Research, Religare Broking.

• Mixed world markets

European shares pulled back slightly on Thursday after a strong rally this week, with investors focused on a European Central Bank meeting where policymakers are expected to provide more aid for the battered euro zone economy, Reuters reported. On the other hand, Asian shares rose to a two-month high on Thursday as expectations of further government stimulus supported investor confidence in economic recovery from the global coronavirus pandemic, a Reuters report said.

The pan-European STOXX 600 index slipped 0.4 per cent, while MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.43 per cent

• Record spike in Covid-19 cases

India recorded the biggest jump in daily coronavirus count with 9,304 people testing positive for the novel virus in last 24 hours, taking the total cases in the country to 216,919, Maharashtra The number of deaths from coronavirus pandemic crossed the grim milestone of 6,000-mark, with 260 additions in last one day.

• Tech Glitch

Many traders and brokers were left high and dry on Thursday, as the National Stock Exchange's (NSE) Bank Nifty option prices were not reflecting accurately on the terminals linked to the exchange.

WHAT TO WATCH OUT FOR

• Speed of rising coronavirus cases will also be keenly watched.

• Investors will also keep an eye on the riots in the USA.

• The developments over souring US-China ties will be closely watched.