Sensex dips 275 points on profit-booking in banking stocks; Nifty below 12,700

NEW DELHI: Buying in IT and pharma stocks was not enough to carry the winning momentum of the last eight sessions on Thursday as profit booking in banking names put a drag on benchmark indices.

Some European countries are registering a record number of Covid-19 cases while logistical constraints with distributing Pfizer vaccine is weighing on sentiments. Stretched valuation as stocks are at all-time highs also kept investors on toes.

Factors driving markets

• Covid cases spike: France reported 35,879 new coronavirus cases on Wednesday, taking the total to 1.86 million, overtaking Russia and making France the worst affected country in the European region.

• Trump refuses to concede: President Donald Trump's campaign on Wednesday took another step in its long-shot legal strategy to upend his election loss with a Michigan lawsuit, while Georgia announced a recount and President-elect Joe Biden worked on laying the foundation of his administration.

• ECB stimulus: The European Central Bank will focus on more emergency bond purchases and cheap loans for banks when it puts together its new stimulus package next month to help the pandemic-hit euro zone economy, ECB President Christine Lagarde said on Wednesday.

• Another vaccine ready?: Moderna Inc said on Wednesday it is preparing to submit data on its experimental COVID-19 vaccine to an independent safety board, which should help determine the vaccine's efficacy.

How are bluechips doing
After opening with cuts, benchmark indices drifted lower. At 9.44 am, BSE flagship Sensex was down 274.96 points or 0.63 per cent to 43,318.71. NSE benchmark Nifty followed and dipped 68.50 points or 0.54 per cent to 12,680.65.

“The Nifty seems to be taking a breather which is natural and healthy for a trend to sustain. If it gets past yesterday's high, it will resume it's uptrend. The overall target for the index could be in the vicinity of 13,000 and hence corrections can be fruitfully utilised to enter the markets. We have good support at 12,000 and till that holds, we can aim for higher targets,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.

In the 50-share pack Nifty, Hindalco was the biggest gainer for the second day, up 2.11 per cent. Shree Cements, M&M, HUL, Sun Pharma, Infosys, Nestle India, Divi’s Labs and Britannia were among other gainers.

IndusInd Bank was the top loser in the pack, down 2.91 per cent. Coal India, HDFC, Kotak Mahindra Bank, HDFC Bank, SBI, Life, Axis Bank, SBI and ICICI Bank were other losers.

Broader markets
Broader market indices saw buying, outperforming their headline peers in morning trade. Nifty Smallcap rose 0.48 per cent while Nifty Midcap added 0.36 per cent. Broadest index on NSE, Nifty 500 was down 0.05 per cent.

Indiabulls Housing Finance, Aarti Industries, Indian Hotels, Laurus Labs, P&G Health and Omaxe were among major gainers from the space while Linde India, Alok Industries, Kaveri Seeds, Apollo Hospitals, LIC Housing Finance and YES Bank were under selling pressure.

Global markets
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.44 per cent, approaching the highest since January 2018. Chinese shares rose 0.37 per cent. Stocks in Japan rose 0.62 per cent to a 29-year high.

Australian stocks bucked the regional trend and fell 0.31 per cent as a decline in copper prices hurt shares in miners. S&P 500 stock futures fell 0.15 per cent.

The Dow Jones Industrial Average fell 0.08 per cent on Wednesday, but the Nasdaq closed up 2 per cent, and the S&P 500 gained 0.77 per cent.

What to expect

• Macro data: The government will release manufacturing and production data for September that will be keenly tracked by markets.

• Inflation: The Centre will also release an inflation figure for October, which will provide an indication towards RBI’s steps in the next policy meet.

• Q2 earnings: Alok Industries, Cochin Shipyard, Eicher Motors, Bombay Burmah, Grasim, Fortis, HUDCO, ITDC, IRCTC, Infibeam, Mahanagar Gas, Power Finance and Natco Pharma among names that will come out with their numbers.