Sensex falls 477 points from day's high on profit booking, ends 25 points lower; all eyes on RBI policy outcome

Mumbai: Benchmark equity indices shrugged off strong cues from global peers and wiped off early gains to settle on a flat note on Wednesday, as caution ahead of the RBI policy outcome triggered profit-taking in index heavyweights.

The continued rapid surge in coronavirus infections also bothered investors. For the seventh day in a row India registered more than 50,000 new Covid-19 cases, taking the total tally past the 19-lakh mark.

“There were only a few stocks participating in the rally in recent times, and those stocks – index heavyweights corrected, dragging the market. It is a fragile market as far as depth of momentum is concerned,” said Deven Choksey, group managing director, KR Choksey Investment Managers.

“The RBI MPC is unlikely to cut rates at this time; we will see the status quo. The market will be keeping an eye on whether they extend the loan moratorium or not,” he added.

Benchmark Sensex dropped 25 points to close at 37,663, erasing 477 points from day’s high. Peer Nifty edged up 6 points to close at 11,102.


Eleven of 30 Sensex stocks closed lower, with Reliance Industries (RIL), HDFC Bank and Infosys contributing the most to the losses for the benchmark as investors booked profits following a robust rally in these counters. These stocks reversed early gains and shed 1.14 per cent, 1.30 per cent and 0.58 per cent, respectively at close.

Despite the flat close, the market breadth tilted in favour of the gainers. Advancing shares beat declining ones in the ratio of 1.6:1 on the BSE.

Broader market outperformed, with BSE Midcap and Smallcap indices rising 0.39 per cent and 0.85 per cent, respectively.

BSE Energy was the biggest sectoral loser as it shed 0.89 per cent, while BSE FMCG dropped 0.24 per cent. The metals pack topped the charts, as it jumped 4.05 per cent.

In stock-specific action, Steel Authority of India (SAIL) jumped 6.37 per cent after its July sales rose 50 per cent.

Private lender Axis Bank advanced 1.39 per cent after it launched a qualified institutional placement (QIP) to raise up to Rs 10,000 crore on Tuesday.

Godrej Properties cracked 2.9 per cent after the company reported a consolidated net loss of Rs 20.23 crore for the quarter ended June. The real estate major had posted a profit of Rs 89.87 crore in the corresponding quarter last year.

Despite being net buyers for last three months, foreign institutional investors (FIIs) have net sold $1.3 billion or Rs 8,968 crore of Indian shares on year-to-date basis, while domestic institutional investors (DIIs) have bought a net of Rs 78,100 crore of stocks in the same period.

Market at a glance

• Sensex down 0.07% or 25 points at 37,663
• Nifty up 0.06% or 6 points at 11,102
• 11 of 30 Sensex stocks close lower
• Top Sensex losers: Power Grid down 1.35%, HDFC Bank 1.30%
• Top Sensex gainers: Tata Steel up 6.33%, Titan 2.85%
• Market breadth positive; advance-decline ratio 1.6:1
• Broader markers outperform; BSE midcap up 0.39%, smallcap 0.85%
• BSE Energy top loser, down 0.87%; MRPL sheds 4.79%, Confidence Petro 3.27%
• BSE Metal top gainer, up 4.05%; Hindalco up 8.32%, SAIL 6.37%
• SAIL rises as July sales jump 50%
• Axis Bank up 1.39% on QIP launch
• Godrej Properties drops 2.09% on Q1 loss

Who moved my market

• Profit booking in index heavyweights

Investors locked in gains in select index heavyweights after the recent rally. RIL dropped 1.14 per cent, while HDFC Bank shed 1.30 per cent, after seeing strong gains in Tuesday’s trade.

• Anxiety ahead of MPC meeting outcome

The outcome of RBI’s Monetary Policy Committee (MPC) meeting is due on Thursday. Analysts are divided over the probability of another rate cut by the RBI as they argue that one-time loan restructuring is much needed at this point to cushion the impact of Covid-19. The meeting is being held in the backdrop of an urgency to revive the economy and increased demand for loan restructuring by industry.

• Firm world equities

European shares rose on Wednesday as positive earnings and the huge quantities of stimulus coursing through the financial system again overshadowed concerns about the surge in coronavirus cases in Europe and the United States, Reuters reported. On the other hand, Asian stocks edged higher after being mixed in early trade, amid investor concern about U.S. stimulus spending and a trade agreement with Beijing. The broader pan-European STOXX 600 index rose 0.8 per cent, while The MSCI Asia Pacific Index increased 0.5 per cent.

• Covid infections breach 19-lakh mark

India's COVID-19 tally reached 19,08,254 today, with 52,779 new cases being reported in a day. Also, recoveries rose to 12,82,215 including 51,706 in past 24 hours, according to the Union Health Ministry data.

What to watch out for

• The key event ahead is the outcome of MPC meeting, which will be announced on Thursday.

• The coronavirus cases in India are yet to peak and are witnessing a record surge each day and are a major cause of worry.

• The movement of global markets will be closely watched as the domestic market tends to follow suit.

• Progress on a domestic as well as overseas vaccine for Covid-19 treatment will be closely watched.

• The ongoing June quarter corporate earnings season is providing a better picture of the impact caused by the Covid19-induced lockdown. More than the numbers for the quarter, the commentary and the outlook have been the moniterables.