A last minute spate of selling pulled the markets back into the red at the close of trading on Monday. After a stellar run last week – which saw the BSE Sensex post its biggest weekly gain since November 30, 2012, on Friday – the markets remained choppy to listless all day as traders await cues from the macroeconomic data to be released later this week.
The Sensex snapped a four-session gaining streak as technology stocks fell on profit-booking, while shares sensitive to interest rates fell after the Reserve Bank of India (RBI) governor rejected that high inflation is the “new normal.”
The 30-share BSE benchmark index closed at 19,646.21, down 37.02 points, or 0.19 per cent. The broader 50-share NSE Nifty slipped 3.35 points, or 0.06 per cent, to end the day at 5,942.35.
RBI governor Duvvuri Subbarao rejected the notion that high inflation is the “new normal” in comments on Friday, raising concerns the central bank could remain hawkish about interest rates.
Tata Power was the biggest gainer on the Sensex, up 2.28 per cent. HDFC (1.91 per cent) and Sun Pharmaceuticals (1.79 per cent), which rose to hit a 52-week high of Rs. 838.5 today, were the other significant gainers on the index, followed by Mahindra & Mahindra (1.10 per cent) and GAIL (0.97 per cent). Hindustan Unilever, however, pared early gains to end only 0.17 per cent higher.
Two-wheeler makers and IT companies were some of the biggest losers. Hero Motocorp, (2.51 per cent) led the pack, followed by Wipro (1.35 per cent), Bajaj Auto (1.33 per cent), and Jindal Steel and Power (1.24 per cent).
Tata Consultancy Services (TCS) and Infosys fell 1.05 per cent and 0.82 per cent, respectively.
In the auto pack, car-makers Tata Motors and Maruti Suzuki ended 0.77 per cent and 0.6 per cent lower, respectively.
Market heavyweights Reliance Industries (RIL) shed 0.86 per cent, while ONGC lost 0.4 per cent.
“Expect the markets to be range-bound in the near term,” analyst Daljeet Kohli of India Nivesh Securities said, adding that the markets are unlikely to move up further.
Amtek Auto’s shares surged to close 5.71 per cent higher after the maker of auto components announced that it will acquire “substantial business interests” of Germany’s Neumayer Tekfor (NT) Group.
Technically, the markets have retraced from a very strong support level at 5,680/5,700 to effortlessly cross the 100 and 20 DMAs (day moving averages). Resistance now comes closer to 6,000, while support comes at 5,840, according to market analyst Sanjeev Bhasin.
Shares in Larsen & Toubro recovered after falling as much as 2.7 per cent earlier this morning after the World Bank barred the company from participating in any of the organisation’s projects for six months. L&T said on Saturday the World Bank sanctions were “not expected to have material impact on the Company’s present or future operations or its profitability or financials” in a stock exchange filing. The stock closed 0.65 per cent higher.
Caesar Maasry of Goldman Sachs said he remained overweight on Indian equities on both a three- as well as a 12-month basis, with a 12-month target of 7,000 for the Nifty.
Analysts say key manufacturing and inflation data, due later this week, will be closely watched ahead of the Reserve Bank of India’s policy meet, scheduled for March 19. A further upside in the stock market will depend on a rate cut decision by the central bank.
“Most equity investors are positioning for a Reserve Bank of India easing (of key interest rates) via banks and rate-sensitives. A second disappointment, after Budget Day, will likely tilt the already edgy investor sentiment to sell-on-rallies mode from buy-on-dips,” Indranil Sen Gupta of Bank of America Merrill Lynch said.
With inputs from Reuters.
Source : NDTV Profit.